Using Mixed-Integer Programming To Determine The Potential For Flour-Milling Industry Expansion

As in most predominantly agricultural states, agricultural producers in Oklahoma have expressed an interest in value-added processing opportunities. While Oklahoma produces mostly hard red winter wheat, most Oklahoma bakers require predominantly soft wheat flour for their products, almost all of which is purchased from out-of-state suppliers. An economic engineering-based, mixed-integer programming model was used to determine the optimal number, size, and location of additional flour mills in Oklahoma to capture this excess flour demand. The results suggest that additional mills are potentially justified and that the potential for additional milling will increase if Oklahoma soft wheat production increases.