360 Int. J. Operational Research, Vol. 30, No.

3, 2017

Integrated of harvesting and production planning in

aromatic coconut supply chain using mixed-integer
linear programming

Chaimongkol Limpianchob
Department of Industrial Engineering,
Faculty of Engineering at Kamphaeng Saen,
Kasetsart University,
Kamphaeng Saen Campus,
Nakhon Pathom, 73140, Thailand
Fax: +66-34-351541
Email: fengckl@ku.ac.th

Abstract: This paper presents an operations research technique that can be

used for a supply chain design with a goal of manufacturing aromatic coconuts
for an export as cheap as possible. The production planning of the aromatic
coconut supply chain was studied for an exporting company in Samut Sakhon
province in Thailand. The planning focused on the forwarding of the aromatic
coconuts to the production plant from the harvested areas in which they were
classified into two groups: 1) the self-owned areas; 2) the contracted areas, or
from the traders. The flow of decisions making associated with the aromatic
coconuts in the plant and how the coconuts got delivered and stored to satisfy
the demand. A mixed-integer linear programming model was proposed to
describe the optimisation of the problem and to propose a realistic planning
model of the aromatic coconuts for the exporting company. The analysis of the
optimisation results and the comparison with traditional planning shows that
the proposed model can help the production operator save up to approximately
11.32% of the operational cost. In addition, the model can be applied to
estimate the coconut processing capacity of the facility to establish future sales
policies.
Keywords: aromatic coconut; operations research; harvesting and production
planning; supply chain management; mixed-integer linear programming.
Reference to this paper should be made as follows: Limpianchob, C. (2017)
‘Integrated of harvesting and production planning in aromatic coconut supply
chain using mixed-integer linear programming’, Int. J. Operational Research,
Vol. 30, No. 3, pp.360–374.
Biographical notes: Chaimongkol Limpianchob received his Master of
Engineering in Management Engineering at Naresuan University, Thailand. He
is a Lecturer at the Department of Industrial Engineering, Faculty of
Engineering at Kamphaeng Saen, Kasetsart University. His research interests
include issues related to mathematical modelling in supply chain and logistics
frameworks, transportation, distribution and production planning with
mathematical model. He has published research papers in many national and
international journals, conference proceeding as well as book chapters.
This paper is a revised and expanded version of a paper entitled ‘Optimal
production planning in aromatic coconuts supply based on mixed-integer linear
programming’ presented at International Conference on Industrial and
Management Engineering, Tokyo, Japan, 29–30 May 2014.

Copyright © 2017 Inderscience Enterprises Ltd.

 Integrated of harvesting and production planning 361

1 Introduction

The exportation trend of the aromatic coconut, one of the agricultural commodities of
Thailand, has been increasing (Ministry of Agriculture and Cooperatives, 2008).
However, the aromatic coconut exporting companies in Thailand often face with the
problems in managing the large volume of the aromatic coconut due to an imbalance
between supply from harvested areas and demands of customers affecting inefficiencies
in the production planning.
Additionally, there are a few large companies operating throughout the complete
aromatic coconut industry supply chain. Raw material for these companies can be
supplied from: self-owned areas, contracted areas or from traders. Both harvested areas
and traders can be either owned by the company or available to the company by
long-term contracts. Once the raw material has been delivered to the processing plant, a
decision has to be made on whether the coconut should be transported to a warehouse for
later processing or sent directly to the processing line. The processing line as defined in
this paper consists of four steps: the trimming into tapered-cylinder form stage, the
quality classification stage, the chemical treatment stage, and the packaging stage, which
can be done in different ways depending on customers’ preferences.
A supply chain is an integrated process in which raw materials are acquired, then get
converted into products and finally get delivered to customers (Chopra and Meindl,
2013). The chain is characterised by a forward flow of goods and a backward flow of
information. Food supply chains compose of organisations that are involved with the
production and the distribution of food (Zuurbier et al., 1996). The main fact that
differentiates a food supply chain from other supply chains is a continuous degradation in
the quality from the time when the raw materials leave the grower to the time when the
products reach the consumers (Tijskens et al., 2001).
In recent years, supply chain modelling and supply chain management have received
a lot of attention from many companies (Ahumada and Villalobos, 2009). They provide a
tool for the integrated planning of several interrelated planning situations. A driving force
in the development of supply chain management systems has been developed for a
company-wide database to obtain data collection and efficient optimisers to solve the
problems; the large, optimisation models are often used. Gunnarsson et al. (2004)
provided a basic description of supply chain modelling. Additionally, Stadtler and Kilger
(2000) explained more detailed description of industrial cases. Some examples including
a case of sugar cane supply chain in Brazil were given by Sanjay and Marcus (2013) and
a case of the aquatic organisms farming was explained by Jerbi at al. (2012).
Mathematical programming planning models have been proposed to develop and
apply to the planning models in different instances of the food industry, particularly the
fruit industry. For example, Miquel and Debora (2011) described a producing unit plant
in the potassium chloride industry and gave an overview of operations management
modelling in the Brazil; they developed a mixed integer linear programming to formulate
planning and distribution models which were applied to estimate the potassium chloride
processing capacity of the facility including the establishment of the future sales policies.
Pourrahimian et al. (2012) reviewed models for the caving operations problem in the
computer software industry. The resulting mixed integer linear programming problem
was solved and optimised using decomposition methods to reduce the computational
effort required. Mora et al. (2014) studied a case of the supply chain network of
automotive original equipment manufacturers (OEMs) as well as considered the expected
362 C. Limpianchob

vehicle recovery network problem under conditions of uncertainty. The problem was
formulated as a mathematical programming model to improve the performance of supply
chain networks and mainly focused on finding the network cost minimisation objective
function, the integration of forward and reverse logistics and the inclusion of
remanufacturing activities.
It can be seen from previous published literatures that the model developed by Blanco
is the closest model to solve the problem studied in this paper. As the industry progresses,
better models need to be constructed to incorporate the real world aspects of its
operations. This paper formulated an optimisation model describing the production
planning problem, including its storage and processing activities. The model developed in
this study was a mixed integer linear programming model and operated in the minimum
cost mode. The model can be used both as an operational planning tool and as a strategic
tool to analyse current planning under various scenarios.

2 Problem description

The company supply chain problem was based on an actual supply chain problem dealing
with the aromatic coconuts from one company in Samut Sakhon, which is a province of
Thailand that has several sources, processing lines, demand nodes and time periods. The
supply chain problem of the company contains decisions concerning the design of the
production flow, the timing of shipping and storage in the warehouse. Main decisions are
associated with whether a harvest should be contracted or from traders. Furthermore, a
consideration of the flow of the aromatic coconuts in each process was applied to satisfy
demands. In addition, it is necessary to consider restrictions on the capacities of the
harvested areas, the production lines, the shipping and the storage in the warehouse. The
general flow diagram for a single processing line is shown in Figure 1 and can be
summarised by the following steps:
1 The fresh coconuts from the self-owned, the contracted areas and from the traders
are forwarded to the plant; a decision needs to be made whether the coconuts should
be stored in the warehouse for further processing (let X1 be coconut from harvested
areas and X2 be coconut from traders) or they should be processed immediately (let
X3 be coconut from harvested areas and X4 be coconut from traders). In general,
storage of non-processed coconuts is undesirable due to economic reasons. However,
it could be necessary if the delivery of the coconuts exceeds the processing capacity
of the line.
2 The coconuts from the harvested areas (X3), the traders (X4) and the warehouse (X5)
are fed to the processing line. These coconuts have been trimmed out of the shells in
a module called TRI.
3 After the first trim stage, the coconuts (X6) enter the second trim (TRII) stage, in
which each top part is trimmed into a conical shape and a part of green peel is
removed by cutting. Then, the coconuts enter a pre-classification stage depending on
size and weight where any non-tradable coconuts are separated for juice production
(W1).
 Integrated of harvesting and production planning 363

4 Once the coconuts have been classified by size, they (X7) enter the third trim module
(TRIII) where they are trimmed their top and bottom parts into a tapered cylinder
with conical top shape at the stem or spikelet end of the fruit.
5 The coconuts are then treated with water containing the special chemical products
(TTM) to prevent brown skin forming on the coconut. After that, the coconut is
treated and dried before further processing.
6 Each coconut enters the quality classification sector where it is classified according
to the degree of defect or damage. Some waste is also produced at this stage (W2).
7 The coconut (X8) enters the packaging section (PAK) where it is packed according to
the characteristics of the container specified by the client.
8 Finally, the processed coconuts are delivered directly to the customers (X9) or they
may be kept in the cold storage facilities (X10) until further delivery (X11).

Figure 1 Schematic diagram of an aromatic coconut plant

The following brief description of several important issues illustrates the complete
scenarios of the activities.

2.1 Supply of aromatic coconuts

The supplying company obtains the coconuts from the two sources, namely the harvested
areas and the traders.
364 C. Limpianchob

The harvested areas can be classified into two groups: the self-owned and the
contracted areas. For an area owned by the company, the coconuts must be removed
during the planning period. On the other hands, the coconuts in the contracted areas are
available by entering into a contract with a supplier. In each harvested area, the volumes
of the coconuts can be estimated because the supply is based on the harvest of the
coconuts from the previous year; it is relatively easy to get a nearly exact estimate. The
coconut productivity is normally carried out during the whole year and the supply is
consistent.
For the traders, the coconuts become available after entering into a contract which
enhances the availability of the coconuts for the whole planning period. For each trader,
there is an estimated volume of the coconuts that is harvested in each period.

2.2 Warehouse
The warehouse is used to balance seasonal variation between supply and demand; it also
offers more shipping possibilities. Throughout the season, the coconut is sourced from
the fresh aromatic coconut that was previously in an excess of the processing capacity of
the line and had been stored in either the warehouse for later processing or the containers
of coconut produced from the packaging section, which requires a cold storage.
Moreover, there is a separate capacity warehouse for the fresh aromatic coconut from the
harvested areas and the coconut products that must be kept in the cold storage. There are
different costs of storage between the cold and the general storage.

2.3 Waste
A fraction of non-tradable coconut due to esthetic issues (damage, imperfections, and
extremes in size, among others) is eliminated from the processing line in the different
classification modules. It will be sold for a coconut juice production.

2.4 Labour policy

The company has a permanent labour, with a single eight-hour working shift throughout
the whole season. However, temporary labour staff may be required to cover two
eight-hour working shifts during certain periods in order to satisfy commercial
commitments.

3 Mathematical model

The sets of variables were described as well as, the constraints and the objective function.
Let I be the set of supply sources, C be the set of customer areas and T be the set of
time periods. The set of supply sources contains subsets for the self-owned areas (IP), the
harvested areas with a potential to be contracted (IPS) and the traders with a potential to
be contracted (IDS). An index i is used for sources; c represents for customer areas, and t
is used for time periods.
 Integrated of harvesting and production planning 365

3.1 Variables
The variables represent the supply of the coconuts in each time period t ∈ T. The
volumes of the forwarding coconuts at a harvest area can be defined as follows:
Spait volume of the coconuts harvested in area i in time period t, i ∈ IP ∪ IPS

X 1t volume of the coconuts forwarded from area i to the warehouse in time period t, i
∈ IP ∪ IPS
X 3t volume of the coconuts directly forwarded from area i to the processing line in
time period t, i ∈ IP ∪ IPS.
The volumes of the forwarding coconuts from a trader can be defined as
Sptit volume of the coconuts transported from the trader i in time period t, i ∈ IDS

X 2t volume of the coconuts transported from the trader i to the warehouse in time
period t, i ∈ IDS
X 4t volume of the coconuts directly transported from the trader i to the processing
line in time period t, i ∈ IDS.
The variables represent the flows of the coconuts in the production lines are also required
as follows:
X 5t volume of the coconuts shipped from the warehouse in time period t

X 6t total volume of the coconuts forwarded to the processing line in time period t

X 7t total volume remaining after screening at the trim process in time period t

X 8t total volume remaining after screening at the dipping process in time period t.

The variables related to the product transportation from the company to the customers
can be defined as:
X 9t volume of the product that is directly transported to the customers without storing
at the end of time period t
t
X 10 volume of the product that is kept in the cold storage at the end of time period t
t
X 11 volume of the product that is shipped from the cold storage to the customers at the
end of time period t.
The variables that are related to warehouse storage defined as
INIt volume of coconuts stored in the warehouse at the end of time period t
t
INII volume of product kept in cold storage at the end of time period t.
where the volume for t = 0 is defined as the initial conditions.
366 C. Limpianchob

So far, all defined variables are continuous variables and they can be interpreted as
network flow variables in a multi-commodity network describing the possible flows of
coconuts from the harvest areas to the production lines.
Next, the set of binary variables needed in the model formulation can be defined as:
⎧1, if the area i is the harvested area in period t , i ∈ I S ∪ I SC ,
Ptait = ⎨
⎩0, otherwise.
These variables represent the decision whether the harvest area should be contracted. In
addition, the variables which represent the possibility to get contracted by the traders is
given by
⎧1, if the trader i is contracted, i ∈ I DC ,
Trait = ⎨
⎩0, otherwise.

3.2 Parameters
A specific production planning can be evaluated by using data including the following
technical and cost coefficients:
CaAi the maximum capacity at source i, i ∈ IS ∪ ISC ∪ IDC
CapPLt the maximum processing capacity
CaWI the draft capacity of the warehouse for the coconut storage
CaWII the draft capacity of the cold storage for the coconut product
CoSi the supply source cost
CoLT the labour cost per volume at trim stage
CoLP the corresponding labour cost at packaging stage
CoIN the inventory cost per volume in the warehouse
CoIC the corresponding inventory cost in the cold storage
Dmd ct the demand of customer c in time period t
RoI the maximum proportion of the waste in the pre-classification sector
RoII the maximum proportion of the waste in the quality classification sector.

3.3 Constraints
The constraints needed for the harvesting in different areas can be calculated using
constraint equations (1) and (2) as follows:

∑ Pta
t∈T
t
i = 1, ∀i ∈ I p , (1)

and
 Integrated of harvesting and production planning 367

∑ Pta
t∈T
t
i ≤ 1, ∀i ∈ I PS . (2)

Constraint equation (1) specifies that each self-owned area has to be harvested exactly
once (in exactly one time period) during the planning period; constraint equation (2)
specifies that each potential harvested area to be contracted has to be harvested at most
once during the planning period. If the constraints in (2) is satisfied strictly with
inequality, then no harvesting takes place in any of the time periods in that harvested
area, which is interpreted as no contract has been taken in that harvest area. Thus, there is
no supply from the harvest area in this case.
Constraint equation (3) indicates that each potential trader to be contracted has to be
forwarded coconut in the same time period they become available,

∑ Tra
t∈T
t
i ≤ 1, ∀i ∈ I DS . (3)

Constraint equations (4) and (5) ensure that the forwarded volume of the coconut in a
period never exceeds the supply source capacity,
Spait ≤ CaAi Ptait , ∀i ∈ I p ∪ I PS , ∀t ∈ T , (4)

and
Sptit ≤ CaATra
i i , ∀i ∈ I DS , ∀t ∈ T
t
(5)

where CaAi is the volume of the coconut available at the source i.

The network structure described in Figure 1 indicates the flow balancing constraints.
The balancing constraints can be formulated as follows:

∑
i∈I P ∪ I PS
Spait = X 1t + X 3t , ∀t ∈ T (6)

Constraint equation (6) ensures that the volume of the coconuts in every time period has
to be further forwarded in the same period, either directly to a processing line or to a
warehouse.
Since the coconuts from traders have to be transported in the same time period when
they become available directly to the processing line or the warehouse, the flow
balancing constraints become,

∑ Spt
i∈I DS
t
i = X 2t + X 4t , ∀t ∈ T (7)

Constraint equations (6) and (7) also assure that the forwarded quantity is equal to the
available quantity. Part of the incoming coconuts ( Spait and Sptit ) which is fed to the
processing line (X3 and X4); if the production capacity is exceeded the production
capacity, the rest is diverted to the warehouse (X1 and X2).
The warehouse has a limited storage capacity of the fresh coconuts. Let CaWI denotes
the storing capacity at the warehouse. The capacity constraints can then be formulated as
shown in constraint equation (8),
X 1t + X 2t ≤ CaWI , ∀t ∈ T (8)
368 C. Limpianchob

The constraint defines the capacity as the volume of the fresh coconut stored at the end of
the period, to guarantee that the volume stored in the warehouse never exceeds the
storage capacity.
The balancing constraints for the fresh coconut in the warehouse are expressed in
constraint equation (9),

INI t = INI t +1 + ( X 1t + X 2t ) − X 5t , ∀t ∈ T (9)

The maximum processing capacity of the processing line is limited by the volume of the
coconuts that can be handled at the entrance to the PI module. Constraint equation (10)
provides a constraint to assure that the capacity is not exceeded,
X 3t + X 4t + X 5t ≤ CapPLt , ∀t ∈ T (10)

For the coconuts entering the TRI module (X6) which may be either the fresh coconuts
entering the system (X3 and X4) or the non-processed coconuts from the cold storage (X5),
the balancing constraints can be formulated according to constraint equation (11),
X 3t + X 4t + X 5t = X 6t , ∀t ∈ T (11)

The coconuts leaving the TRII module as the fraction of the non-wasted pieces entering
the module can be expressed by constraint equation (12),
X 6t = (1 − RoI ) X 7t , ∀t ∈ T (12)

where RoI is the fraction of the wasted coconuts based on their size and weight.
Following the TTM module, in a similar way, the quality classification for the defects
and damages are described by constraint equation (13),
X 7t = (1 − RoII ) X 8t , ∀t ∈ T (13)

Since the coconuts from the TTM process have to be packed immediately, either directly
to the customer (X9) or to the cold storage (X10) for later transportation, the flow
balancing constraint is described in constraint equation (14),
X 8t = X 9t + X 10
t
, ∀t ∈ T (14)

A number of capacity restrictions regarding to a storing of the products at the cold

storage need to be considered. Let the total storage capacity be denoted by CaWII. Then,
the constraint on cold storage is shown in constraint equation (15),
t
X 10 ≤ CaWII , ∀t ∈ T (15)

and the balancing constraint for the stored products remaining in the cold storage for any
delivered coconuts to customers is expressed by constraint equation (16),
INII t = INII t +1 + X 10
t
− X 11
t
, ∀t ∈ T (16)

Finally, the constraints are required to ensure that all customer demands are satisfied. The
demand of the customer c in time period t is denoted by Dmd ct . The demand constraints
can now be expressed by constraint equations (17) and (18),
 Integrated of harvesting and production planning 369

X 9t + X 11
t
≥ ∑ Dmd ,
c∈Cus
t
c ∀t ∈ T (17)

and

∑( X
t∈T
t
9 + X 11
t
)≥ ∑ ∑ Dmd
c∈Cus t∈T
t
c (18)

The constraints that assure the total demand at the end of period t will be satisfied can be
determined from constraint equations (17) and (18).

3.4 Objective function

The objective for the supplying and planning company is to minimise the total cost for
satisfying the contracted demand. The total cost can be expressed as:

z = C sup + C lob + C inv

where Csup = supply source cost, Clob = labour cost and Cinv = inventory cost.
Let CoSi be the fixed harvesting and purchasing cost for the supply source i, which
can be either for the harvested area or the trader. The total supply source cost can now be
expressed as in equation (19):

C sup = ∑∑ CoS Pta + ∑ ∑ CoS Pta + ∑ ∑ CoS Tra

i∈I P t∈T
i
t
i
i∈I PS t∈T
i
t
i
i∈I DS t∈T
i
t
i (19)

where these three terms express the fixed harvesting cost in the self-owned areas, the
fixed harvesting cost in the contracted areas and the fixed purchasing cost of the traders,
respectively.
Let CoLT be the labour cost per volume at the trim stage, and let CoLP be the
corresponding labour cost at the packaging section. The total labour cost can then be
determined using the following equation (20):

C lab = ∑ CoLT ( X
t∈T
t
6 + X 7t ) + ∑ CoLP ( X
t∈T
t
8 ) (20)

where the first term expresses the labour cost of the trim sector (TRI, TRII, and TRIII)
and the second term expresses the labour cost of the packaging sector. Finally, the
inventory cost at the warehouse and in the cold storage must be defined.
Let CoIN be the inventory cost per volume stored in the warehouse, and let CoIC be
the corresponding cost of the cold storage. The total inventory costs can be expressed as

C inv = ∑ CoIN ( X
t∈T
t
1 + X 2t ) + ∑ CoIC ( X
t∈T
t
10 ) (21)

where the first term expresses the cost of storing in the warehouse, and the second terms
expresses the cost of keeping product in the cold storage.
370 C. Limpianchob

4 Solution methods and computational results

The test problem has been derived from one of the largest companies which exports the
aromatic coconuts in Samut Sakhon province; therefore, the company has a large number
of the harvested areas which can be considered as the self-owned. Information regarding
to the size of the test problem is given in Table 1.
Table 1 Size of the test problem.

Parameter Size of the test problem

Number of the self-owned areas 328
Number of the contracted areas 145
Number of the trader areas 1,054
Number of the customers 26
Number of the time periods 52

4.1 Solution methods

The mixed integer linear programming formulation described in the previous section
was implemented by using the model language AMPL (Fourer et al., 2003). In addition,
the problem was solved with standard mathematical programming software with the
branch-and-bound algorithm called ILOG CPLEX 8.0 (ILOG, 2003). The computational
tests were performed on an Intel CORETM i5 with 3.30 GHz processor and 4.00 GB of
RAM.
The modelling language AMPL was used to model the problem. The default setting
was used to solve the mixed integer linear programming problem directly by utilising
CPLEX. The tolerance from the optimal integer solution was set to 0.05%.
Table 2 Computational results of the test problem

Result of solving
Objective function (THB) 51,644
Supply source cost 36,328
Labor cost 10,512
Inventory cost 4,804
Total number of the variables 94,646
Number of the binary variables 42,480
Number of the integer variables 51,746
Number of the linear variables 420
Number of the constraints 2,184
Solver memory used (megabytes) 4,584
Solution time in CPU (second) 1,126
Gap tolerance (%) 0.05
 Integrated of harvesting and production planning 371

4.2 Computational results

The computational result is given in Table 2. The objective function value is presented as
a cost per container.
Table 2 shows that the quality of the solution is very high as there are diminutive gaps
in the optimal integer solution (0.05%). The optimal total cost of the operations for this
scenario is THB 51,644 per container. This total cost was approximately11.32% lower
when compared to the total cost configuration of the based case (THB 58,240 per
container).
To observe the optimal total cost of the model, the main result is about THB 51,644
per container with a supply source cost is estimated as 70%, 20% for a labour cost and
10% for an inventory cost, respectively. The differences of the total cost apparently come
from the supply sources cost. It is an important majority of the total cost; if the supply
sources cost has more uncertainty, then the company would select the fresh coconuts
from the traders of which more variances exist. As a result, the total cost will be high as
well. In the season periods, the supply source cost will be decreased that the company
may be allocated large amounts of the coconuts to be processed or stored for further
processing.
An optimal allocated of the coconuts is a useful method to manage this problem. Such
an optimal management mainly involves with the trade-off between the cost and the time
of harvesting including keeping the coconut in the cold storage which represents a major
operability cost. Thus, better levels of sale prices can be expected. In such mode, the
model becomes a valuable tool for the manager of the aromatic coconut exporting
company to estimate the future resources requirements, the processing capacity as well as
to identify potential bottlenecks of the system in order to establish sales commitments for
the next business year.
Thus, to demonstrate the supply source cost has more influence on the total cost than
other costs; the sensitivity analysis was used for analysing the impact of the data. The
model was tested by an increment of 10% of the supply source, the labour and the
inventory cost (Bligen and Ozkarahan, 2007). The resulting total cost and the percentage
change in the total cost are shown in Table 3.

Table 3 Sensitivity analysis of selected operating conditions on total cost

Increasing supply Increasing inventory

Increasing labor cost
Percentage source cost cost
change Change in Change in Change in
Total cost Total cost Total cost
total cost total cost total cost
10 52,935.1 2.5 51,953.8 0.6 51,654.3 0.02
20 53,709.8 4.0 52,005.5 0.7 51,660.5 0.03
30 54,794.3 6.1 52,108.8 0.9 51,664.7 0.04
40 55,362.4 7.2 52,160.4 1.0 51,669.8 0.05
50 56,446.9 9.3 52,212.1 1.1 51,674.9 0.06
372 C. Limpianchob

It can be seen that the total cost is sensitive to the change in the supply source cost.
Changes in the labour and the inventory costs have a smaller effect on the total cost. For
example, 10% increase in the supply source cost will cause a 2.5% increase in the total
cost, while 10% increase in the labour cost and the inventory cost will cause 0.6% and
0.02% increase in the total cost, respectively. The results obtained are reasonable because
the supply source cost is an important cost component in the model’s cost structure. That
is to say the supply sources from the traders have a higher cost than their self-owned
areas; the proper harvesting planning can result in a large monetary savings.

4.3 Business strategy and planning models

The design and the usage of the mathematical programming system to a great extent
depend on the description, the manipulation and the display of data (Fourer, 1997). The
model of this problem can be constructed more effectively by closely reflecting the
structure of the application. Three problems were generated to test the model with various
strategic analyses as shown below.
• problem 1 – the basic case.
• problem 2 – increased demand. The demand at all customers is increased by 10% in
a single time period. This problem represents a situation where the company have
unexpected demand in one period.
• problem 3 – more customers. This is an important aspect as the company frequently
has to give offers to new customers.
Table 4 Results of the different problems

Problems Solution (THB) Time (second)

Problem 1 51,644 1,126
Problem 2 53,552 1,542
Problem 3 54,666 1,815

From Table 4, it can be seen that the solution time is acceptable and within practical time
limits. The quality of solutions is very high as get diminutive gaps to the optimal integer
solution. The gap is of the size 0.05%–0.10% for the three problems.
Cost comparisons for the three problems illustrate the differences in the total costs.
Problem 1 has the lowest total costs because there are no constraints on demand while the
customers are increasing. Additionally, the result of problem 2 has lower total cost than
problem 3; however, the difference in the total cost is only about 2%. Moreover, it can be
observed that when the company has more customers or an increasing demand, it affects
the total cost because they have reflected high values of the harvest and increased labour
cost for working. Furthermore, the self-owned supply sources were not enough to
forward the fresh coconuts to the processing line. As a result, the company has to forward
them from the traders with an extra cost. For solving of these cases, the company should
have more harvest areas that are owned by the company or the contracted areas from the
traders which the coconuts are available without the extra cost. The three problems which
represent various strategic analyses can be implemented when it has the demand and the
increase of customers in the future.
 Integrated of harvesting and production planning 373

5 Conclusions

In summary, this paper presented the mathematical model and the solution that can be
used as an excellent tool to support a decision-making for the production planning of the
supply chain of the aromatic coconuts. The mathematical model developed provides a
detailed description of the supply chain problem. It has been applied to the minimum cost
mode to estimate the production capacity of the facility as well as its results presented for
the processing plant where the single processing line was employed.
A commercial linear programming solver (CPLEX) was successful in finding very
high quality solution as the objective function values were within 0.05% of the optimal
value. The model was successfully tested utilising real-world industrial data. Moreover, it
is possible to evaluate a number of strategic analyses. The model provides better and
more flexible solutions compared to a manual planning. Furthermore, it allows easy
testing of different strategies and scenarios. Finally, it is strongly recommended that this
model and the approach to obtain an optimal solution can be used as an important and
excellent tool to support a decision-making for a planning staff of any entrepreneur in the
relevant industry.
Several improvements to address more realistic versions of the system are possible
for the future work to include for example, the consideration of several parallel
processing lines and the issues of transportation modes among others. A further extension
of the present work could be included in the explicit consideration of the stochastic nature
of the system into the study.

Acknowledgements

This research is supported by the Postharvest Technology Innovation Center,

Commission on Higher Education, Bangkok, Thailand.

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