Modelling New Zealand milk: From the farm to the factory

Abstract

Dairy products have long been an important dietary component, particularly for young children. Because of this the dairy industry is especially sensitive to contamination scares, and dairy is of particular importance to the New Zealand economy. This paper develops a Markov chain model for the early stages of the dairy supply-chain. Using the case of a major New Zealand Dairy company, simulations are run under various product-testing scenarios. Results point to the importance of where and when testing and interventions take place. Being strict about removing potentially contaminated product early on in the supply chain can reduce total losses and improve overall production output.