Determining the Location of a Milk Condensing Plant in Tennessee

Given the increasing popularity of local foods and the desire to reduce shipping costs and carbon footprint, Tennessee-based dairy product producers are showing interest in sourcing fluid milk locally. Based on dairy farmer surveys, discussions with industry leaders, shipping distances, and transportation costs estimates, a mixed integer linear programming model is used to determine the optimal location of an in-state milk condensing plant. The objective is to minimize the total transportation costs of shipments of fluid milk from farms to the condensing plant plus the transportation cost of shipments of condensing plant products to further in-state processing. Twelve scenarios of the model were analyzed with Rutherford County consistently being found as the optimal, transportation cost-minimizing location.