Cash flow management network models with quantity discounting

S Jorjani and Bw Lamar

Omega, 1994, vol. 22, issue 2, 149-155

Abstract: Cash flow management concerns the financial control and planning of a firm's net cash inflows and outflows. In this paper, we develop a network model to represent cash flow problems that involve a decrease in marginal costs (or an increase in marginal revenues) as the volume of cash increases. This type of problem, referred to as quantity-based discounting, is converted to a minimum concave cost network flow model. By making this conversion, we are able to solve efficiently the quantity-based discounting problem using established algorithms. A short-term money market investment problem is used to illustrate the mathematical models developed in this paper.

Keywords: cost; models; investment; non-linear; programming; network; flow; models (search for similar items in EconPapers)
Date: 1994
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