IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v12y1965i1p1-36.html
   My bibliography  Save this article

Optimal Short Term Financing Decision

Author

Listed:
  • A. A. Robichek

    (Stanford University)

  • D. Teichroew

    (Stanford University)

  • J. M. Jones

    (Stanford University)

Abstract

The cash requirements of many firms follow a seasonal pattern. These firms may obtain short term cash to cover their seasonal needs from a variety of sources: e.g., lines of credit, delaying of accounts payable, term loans, pledging or factoring receivables, etc. Each of these alternative sources of cash may have different costs as well as special restrictions. Given the set of cash requirements and the costs and constraints relating to alternative sources of cash, it is often difficult to determine the optimum manner of meeting the short-term cash needs. In this paper, this short-term financing problem under certainty is formulated as a mathematical model and solved through the use of a general linear programming routine. Optimum solutions are determined for a number of cases and the general form of the solution is discussed. The paper includes an analysis based on marginal costs and a discussion of the short-term financing problem under uncertainty.

Suggested Citation

  • A. A. Robichek & D. Teichroew & J. M. Jones, 1965. "Optimal Short Term Financing Decision," Management Science, INFORMS, vol. 12(1), pages 1-36, September.
    • Handle: RePEc:inm:ormnsc:v:12:y:1965:i:1:p:1-36
    DOI: 10.1287/mnsc.12.1.1
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.12.1.1
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.12.1.1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Magni, Carlo Alberto, 2009. "Splitting up value: A critical review of residual income theories," European Journal of Operational Research, Elsevier, vol. 198(1), pages 1-22, October.
    2. Magni, Carlo Alberto, 2016. "Capital depreciation and the underdetermination of rate of return: A unifying perspective," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 54-79.
    3. Ebenezer Bugri Anarfo, 2015. "Determinants of Capital Structure of Banks: Evidence from Sub-Sahara Africa," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(4), pages 624-640, April.
    4. Correia, Ricardo & Población, Javier, 2015. "A structural model with Explicit Distress," Journal of Banking & Finance, Elsevier, vol. 58(C), pages 112-130.
    5. Magni, Carlo Alberto, 2010. "Residual income and value creation: An investigation into the lost-capital paradigm," European Journal of Operational Research, Elsevier, vol. 201(2), pages 505-519, March.
    6. Jean-Marie Vergé, 1969. "Un modèle séquentiel de financement optimal à long terme dans l'entreprise," Revue Économique, Programme National Persée, vol. 20(2), pages 302-336.
    7. Manak C. Gupta, 2016. "An Integrated Model for the Cost-Minimizing Funding of Corporate Activities over Time," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 1-18, November.
    8. John A. Buzacott & Rachel Q. Zhang, 2004. "Inventory Management with Asset-Based Financing," Management Science, INFORMS, vol. 50(9), pages 1274-1292, September.
    9. Marcos Melo & Feruccio Bilich, 2013. "Expectancy balance model for cash flow," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(2), pages 240-252, April.
    10. Jongmoo Jay Choi & Frank J. Fabozzi & Uzi Yaari, 1989. "Optimum Corporate Leverage With Risky Debt: A Demand Approach," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 12(2), pages 129-142, June.
    11. Biermann, Steffen & Ewelt-Knauer, Corinna & Wömpener, Andreas, 2014. "Welchen Effekt haben Bond-Ratingänderungen und deren Begründung auf den Shareholder Value?," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 68(1), pages 23-46.
    12. Keith V. Smith, 1979. "Constituencies, Attributes, And Goals In Financial Research," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 2(1), pages 1-12, March.
    13. Guillen, Gonzalo & Badell, Mariana & Puigjaner, Luis, 2007. "A holistic framework for short-term supply chain management integrating production and corporate financial planning," International Journal of Production Economics, Elsevier, vol. 106(1), pages 288-306, March.
    14. Roland Pérez, 1971. "Décisions financières et valeur de l'entreprise. Deux approches néo-classiques alternatives," Revue Économique, Programme National Persée, vol. 22(5), pages 792-811.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:12:y:1965:i:1:p:1-36. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.