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Modeling Supply Chain Network: A Need to Incorporate Financial Considerations

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In the past few years, important supply chain decisions have captured managerial interest. One of these decisions is the design of the supply chain network incorporating financial considerations, based on… Click to show full abstract

In the past few years, important supply chain decisions have captured managerial interest. One of these decisions is the design of the supply chain network incorporating financial considerations, based on the idea that establishment and operating costs have a direct effect on the company’s financial performance. However, works on supply chain network design (SCND) incorporating financial decisions are scarce. In this work, we address a SCND problem in which operational and investment decisions are made in order to maximize the company value, measured by the Economic Value Added, while respecting the usual operational constraints, as well as financial ratios and constraints. This work extends current research by considering debt repayments and new capital entries as decision variables, improving on the calculation of some financial values, as well as introducing infrastructure dynamics; which together lead to greater value creation.

Keywords: supply; supply chain; financial considerations; chain network

Journal Title: Operational Research
Year Published: 2019

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