2012-13 Indian Institute of Management Bangalore

[Synopsis]
Madurai Aavin Milk dairy (MAMD) faced challenges in maintaining the market leadership to remain
profitable.
MAMD used several mathematical techniques to analyze and optimize supply chain with perishable
products and many alternative production options

[Challenge]
Milk being a perishable product, there were several supply chain challenges especially in countries such
as India where the farmers may not have any cold storage facilities.
Indias recent economic growth had resulted in a substantial increase in the demand for milk and milk
products, whereas, the production had not improved to match the increased demand.
MAMD had to make several supply chain decisions to ensure that they were able to meet the demand as
much as possible and also remain a profitable dairy.

[Approach]
MAMD used mathematical models to:
Forecast the future demand for a product (premium milk in this case) using regression and forecasting
techniques.
Understand the presence of seasonality in the data and use techniques to deseasonalize the data.
Formulate the milk supply problem and to optimize the profit using Mixed integer linear programming
(MILP) technique.

Madurai Aavin Milk Dairy
Case study