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Cash Management in Production Planning: An Approach for Iranian Industries

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Author Affiliations

  • 1Department of Industrial Engineering, Amirkabir University of Technology,424 Hafez Avenue, 1591634311, Tehran, IRAN

Res. J. Recent Sci., Volume 3, Issue (1), Pages 23-32, January,2 (2014)

Abstract

This paper presents a financial production planning model for Iranian industries and similar production environments. Iranian production environment entails a rather unique combination of financial aspects such as high inflation/interest rate, payments by installments and cash shortage problems. In Iranian markets, payments via installments are very common and usually buyers can choose among the available temporal patterns of payment. To incorporate this phenomenon in the production planning model, the concept of financial exchange patterns is defined. By combining these patterns with cash flows, availability of loans, time value of money and classic elements of production planning, a suitable model for Iranian industries is developed. The advantage of this model over the classic model is illustrated via extensive numerical experiments which are based on real data and reasonable scenarios.

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