Mathematical programming, optimization, constraints, reduced cost, shadow prices.
Objective: To evaluate the optimization level of a dairy production unit (DPU) through a mathematical programming model (MP). It is expected that by maximizing net income by at least 10%, the DPU will be more profitable than without optimized management.
Design/Methodology/Approach: The analysis was carried out under the economic approach of agricultural production, taking into consideration 11 decision variables in the objective function (OF), which was subject to 20 constraints. The variables were based on the requirements of the demand for dairy by-products, using technical coefficients (input-output coefficient). Excel® Solver® was used to develop the sensitivity report and to analyze the shadow prices and reduced costs.
Results: Three scenarios were modeled. Between the first and third scenario, the income increased to $58,000.00 (41.02%). Between the second and third scenario, the income increased to $63,840.00 (46.16%).
Study Limitations/Implications: Dairy food processing is an important industry in the economies of the world.
Findings/Conclusions: Panela cheese recorded the highest shadow price ($72.85), which indicates that the DPU should concentrate on this type of dairy product. In conclusion, the optimization of the DPU guarantees the efficient use of scarce resources and therefore generates a higher profit.