INTEGRATING WORKING CAPITAL DECISIONS

ABSTRACT

This paper considers the problem of integrating the main components of working capital decisions within a discounted cash flow framework in order to study the interrelationships among inventory, procurement, cash discounts, accounts payable and account receivable policies. The model yields a set of policies which are not only simple to implement but have intuitively appealing economic significance.

Notes

F.J. ARCELUS is a Professor of Quantitative Methods in Management at the University of New Brunswick, Canada. He received a B.Sc. in Quantitative Methods in Business and Economics from The California State University at Northridge and an MS in Industrial Administration and a Ph.D. in Urban and Public Affairs from Carnegie-Mellon University. He is currently involved in interdisciplinary research in the areas of Accounting Policy, Regional Planning and International Business, in addition to his major research interests in Inventory Control and Production Planning. He has published articles in a variety of journals, including Management Science, Technometrics, HE Transactions, European Journal of Operations Research, International Journal of Production Research, Journal of the Operational Research Society, International Journal of Production Economics, Accounting Horizons, Public Finance, Mathematical Social Sciences, Journal of Money, Credit and Banking and Growth and Change.

G. SRINIVASAN is a Professor of Finance at the University of New Brunswick, Canada. He received a Masters degree in Commerce from SriVenkateswara University and a doctoral degree from the Indian Institute of Management at Ahmedabad, India, as well as the professional accounting designation of CGA Canada. He is currently doing research in the areas of Inventory Models, International Business, Fiscal Incentives and Investment and Accounting Policies His papers have appeared in a number of journals including Management Science, Sankhya, European Journal of Operations Research, Journal of the Operational Research Society, International Journal of Production Economics, Omega and International Journal of Management.