Improving Dairy Plant Procurement in a Competitive Dairy Market of Primorsky Krai

Abstract

The article substantiates that the key element influencing the volume and structure of production of milk with specific fat content is well-organized dairy plant procurement. Its effectiveness depends on the principles of combining certain factors that determine the specificity of the regional dairy market. The present study is based on an evaluation of the features of procurement of about 7 dairy plants in Primorsky Krai in order to develop an optimistic scenario for the development of the industry, minimize the costs of enterprises and maximize customer satisfaction. The present paper considers the problems of increasing the competitiveness of dairy products of JSC "Vladivostoksky Dairy Plant" by optimizing procurement. In particular, the needs of the regional market, suppliers of whole milk, as well as methods to optimize the volume of milk procurement taking into account the structure of demand for dairy products in Primorsky Krai and suppliers' ability to provide the main characteristics of the quality of raw milk are studied. For this purpose, the optimization model for procurement is developed in the study, which allows to flexibly respond to changing requirements of the market taking into account the capabilities of suppliers. The goal of the proposed method is in the application tools, which will allow regional dairy plants to adapt to market demands in terms of quality and fat content of the milk produced. Due to this, the model can be useful for many dairy producers, including the format of both large dairies and small farms.Keywords: milk fat content; optimization model of procurement; dairy market of Primorsky KraiJEL Classifications: Q13, Q18