Elementary Applications of Programming Techniques in Working-Capital Management

The following sections are included:

• Introduction

• Linear Programming

• Working-Capital Model and Short-Term Financial Planning

  • Questions to be Answered

  • Model Specification and Its Solution

  • Which Constraints are Causing Bottlenecks?

  • How Much More Profit is Being Lost Because of Constraints?

  • How do the Constraints Affect the Solution?

  • Duality and Shadow Prices

  • Short-Term Financial Planning

• Goal Programming

  • Introduction

  • Application of GP to Working-Capital Management

  • Summary and Remarks on Goal Programming

• Programming Approach to Cash Transfer and Concentration

  • Transfer Mechanisms

  • Cash-Transfer Scheduling: Contemporary Practice

    • Managing About a Target

    • Anticipation

  • Weekend Timing and Dual Balances

  • Limitations of the Popular Techniques

  • Mathematical-Programming Formulation

    • The Objective Function

    • Constraints on Transfers Include: Average Balance, Flow Balance, Minimum Balance, and Maximum Transfer

    • Formulation Summary

    • Deposit Variation

  • Relation of Model Formulation to Current Practice

    • Implementation Tests

    • Field Concentration Tests

    • Lockbox Concentration

• Summary and Concluding Remarks

• Problem Set

• Appendix 21.A. The Simplex Algorithm for Solving Eq. (21.8)

• Appendix 21.B. Mathematical Formulation of Goal Programming

• References for Chapter 21