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Supply chain management is the plan and control of material and information flow among suppliers, facilities, warehouses and customers with the objectives of minimization of cost, maximization of customer services and flexibility. The supply chain of a business process comprises mainly five activities viz., Purchase of materials from suppliers, transportation of materials from suppliers to facilities, production of goods at facilities, transportation of goods from facilitates to ware houses and transportation of goods from ware houses to customers. In this paper, a supply chain model is developed for a dairy industry, located in Andhra Pradesh, India. The supply chain includes four echelons namely raw milk suppliers, plant, warehouse and customers. In this model, emphasis is mainly on production and distribution activities, with a view to find out purchase plan of raw milk, production plan of product mix and transportation plan of the products. [ABSTRACT FROM AUTHOR]