A milk collection problem with blending

A milk collection problem with blending is introduced. A firm collects milk from farms, and each farm produces one out of three possible qualities of milk. The revenue increases with quality, and there is a minimum requirement at the plant for each quality. Different qualities of milk can be blended in the trucks, reducing revenues, but also transportation costs, resulting in higher profit. A mixed integer-programming model, a new cut, and a branch and -cut algorithm are proposed to solve medium-sized instances. A three-stage heuristic is designed for large instances. Computational experience for test instances and a large-sized real case is presented. (C) 2016 Elsevier Ltd. All rights reserved.