Make or mix to order: Determining the type of intermediate products in a flour mill

In contrast to discrete manufacturers, food-processing companies can sometimes produce the same end products in different ways: either mix early and process or process first and mix later. Moreover, a product can be mixed from different raw materials or intermediates. That implies that choices can be made not only with regard to where to store, but also what to store, which is currently not covered in Decoupling Point (DP) theory. This paper explores this joint problem for a flour mill. The number and type of intermediate products in the DP is determined using a two-stage mathematical program. The model facilitates decision-making for the management of the mill regarding what to store, but is also useful to support decisions for capacity increase or investments in storage tanks. We also contribute to DP theory in developing a quantitative tool tailored to food processing characteristics.