Optimization of the Production Planning and Trade of Lily Flowers at Jan de Wit Company

Jan de Wit Company implemented a decision-support system based on linear programming as a production-planning and trade tool for the management of its lily flower business. The LP maximizes the farm's total contribution margin, subject to such constraints as market-defined sales limits, market requirements, characteristics of the production cycle duration, technical requirements, bulb inventory, and greenhouse limitations. The main decision variable to be calculated is the number of flower beds in a specific greenhouse, from a specific bulb batch, of a specific variety, for a specific purpose, taking into consideration planting and expected harvesting weeks. Between 1999 and 2000, company revenue grew 26 percent, sales increased 14.8 percent for pots of lilies and 29.3 percent for bunches of lilies, costs fell from 87.9 to 84.7 percent of sales, income from operations increased 60 percent, return on owner's equity went from 15.1 to 22.5 percent, and best quality cut lilies jumped from 11 to 61 percent of the quantities sold. The system also suggested changes in the product mix.