A novel facility and equipment selection model for whey utilisation: A Brazilian case study

Whey is a by-product of cheese making that is a potentially important source of nutrients, but which currently goes to disposal in many parts of the world. In this paper, we analyse the efficiency of investment in whey-processing with the aim of releasing the productive potential of currently unexploited whey supply chains. We introduce a decision support model for production and distribution of products derived from whey that extends a globally inclusive facility location problem. The basic tenet of the model is that equipment selection during the initial stages of facility planning is critical, as capital costs in the early stages of supply chain design go into purchases of new machines and site conditioning. The model selects the optimal combination of whey processing equipment, facility locations and transportation routes subject to budget, equipment availability and final product requirements. The results from the model inform the members of a cluster of cheese makers on the infrastructure investments that better release the productive potential of the supply chain of their valuable by-product and, at the same time, avoid environmental damage. We use the model to find the optimal configuration of a whey supply chain for an actual cluster of small cheese makers in Minas Gerais, Brazil, and demonstrate that important savings can be achieved by investing early on in adequate processing facilities.