Analysis of logistic cost in contract agriculture: the case of barley supply chain in Hidalgo, Mexico

Malted barley is the main raw material for brewing. In the last decade, Mexico has consolidated its position as the main beer brewer in the world. Freight and the operations related to the distribution of the harvest have an effect on the production costs and the amount of sawed, harvested and sold grain. This research study aimed at obtaining a mixed integer linear programming model and applying it in a malted-barley supply chain in Mexico. The model design a distribution network with minimal freight costs, considering variables like penalties/incentives, crop yields and costs of collecting points. This model allows identifying better scenarios that could be configured according to the agricultural contract that prevails in this chain. The results obtained in three possible scenarios showed through variations in the supply, demand and penalties / incentives the convenience of distributing 50% of the harvest obtained to each of the two malts with minimum costs between 329,210 and 598, 231 USD.