Within Dow AgroSciences, we are continually analyzing our supply chains to ensure they are running efficiently. To date, this has typically involved focusing on a particular aspect of the supply chain: logistics costs, manufacturing costs, inventory holding/costs, capacity utilization, etc. One problem with this approach is that looking at each of these aspects independently may lead to sub-optimal overall cost solutions. Another problem is that these analyses have mainly focused on cost minimization, whereas the real goal should be profit maximization.

In order to optimize a global supply chain it is important to take into consideration not only the fixed and variable costs of manufacture, but the freight, duty, tax, inventory, and regulatory implications of the entire production chain. In order to achieve this, a MILP model was developed which incorporates all of these aspects in a single objective of maximizing the economic profit of the system.

Details of the model formulation, data collection, and solution methods will be presented. While no specific results will be shown due to confidentiality, a discussion of the uses and limitations of the model will be presented.