-A linear programming mathematical model was applied to a representative dairy farm located in Brazil. The results showed that optimization models are relevant tools to assist in the planning and management of agricultural production, as well as to assist in estimating potential gains from the use of integrated systems. Diversification was a necessary condition for economic viability. A total cost reduction potential of about 30% was revealed when a scenario of lower levels of diversification was contrasted to one of higher levels. Technical complementarities proved to be important sources of economies. The possibility of reusing nitrogen, phosphorus, and potassium present in animal waste could be increased to 167%, while water reuse could be increased up to 150%. In addition to economic gains, integrated systems bring benefits to the environment, especially with reference to the reuse of resources. The cost dilution of fixed production factors can help economies of scope to be achieved. However, this does not seem to have been the main source of these benefits. Still, the percentage of land use could increase up to 30.7% when the lowest and the highest diversification scenarios were compared. The labor coefficient could have a 4.3 percent increase. Diversification also leads to drastic transaction cost reductions.
This paper addresses a hierarchical optimization model for the sugar-alcohol energy sector with robust optimization analysis to provide managerial insights. It has two levels: the upper level is a linear model in which more aggregated decisions are related to allocating production targets to mills belonging to a cooperative society aiming to meet the potential market demand, as well as managing the inventories over months in annual planning; the lower level is a mixed-integer model that represents the less aggregated decisions of each mill, such as the milling rhythm, the industrial process selection to produce sugar-alcohol-molasses and energy, purchasing sugarcane from the suppliers on a weekly basis. Robust optimization analysis is performed for product prices and industrial yields to investigate their impacts on the supply chain that could not be inferred through deterministic approaches. One important result was related to the uncertainty in product prices that had a greater impact on the whole supply chain compared to the industrial yield, which affects only the mill itself, particularly increasing the inventory backlog of the mill for not meeting the demand assigned by the cooperative. Cogeneration of energy, and the sale of surplus energy was an important strategy to mitigate the decrease in industrial yield performed in the robust analysis while the change in the product production pattern was a consequence of product price uncertainty. The models can be applied in practice to provide better strategic and tactical planning of mills in cooperatives.
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