Research Progress Report 94
February, 1964
Computer Controls for Ice Cream Production
Eldon L. Kreider and James C. Snyder, Department of Agricultural Economics
Modern electronic computers can be used to control the cost and quality of ice cream mixes via the mathematical technique known as linear programming. Currently such diverse products as animal feeds and sausage are being formulated with the aid of linear programming. Icecream production is equally suitable for the application of LP. Current dairy industry application, while spotty, is increasing significantly.
Despite increased adoption of this technique it is not being used to its full potential. All too frequently, management is content to compute only the basic least-cost ice cream formula without regard to related LP information that may be generated from a computer run. Procurement guides, formula quality specification costs and ingredient substitution cost are indicative of the type of valuable guides that enhance the effectiveness of the technique.
The objective of this report is to outline procedures for fully utilizing the information generated by LP analysis, including:
1.	The sensitivity of least-cost formulas to changes in ingredient cost.
2.	The sensitivity of formula cost to quality specifications of the ice cream mix.
3.	The cost of individual quality specifications of the ice cream mix.
4.	Computer report generation of least-cost information.
In all cases, emphasis will center on routine commercial use of linear programming by ice cream plants irrespective of their size, whether in-company or service bureau computer installations are used.
The Basic Formulator
For readers who are unfamiliar with least-cost formulation, consider the accompanying example of a 10 percent butterfat ice cream mix. A representative group of ingredients are costed at Indianapolis area prices for October 1962 (Table 1). The costs given are the total of market price, a hand-lingcharge and an allowance for handling losses such as quantities of material sticking to the walls of the storage tank. Since all milk by-products were costed at market costs, some costs will be higher than would be expected for in-plant by-products.
Maximum and minimum levels for the various factors are shown in Table 2. Practical quality standards and legal requirements were considered in setting these limits. The size
PURDUE UNIVERSITY • Agricultural Experiment Station • Lafayette, Indiana