Simultaneous optimization of process operations and financial decisions to enhance the integrated planning/scheduling of chemical supply chains

This paper addresses the integrated planning/scheduling of chemical supply chains (SC) with multi-product, multi-echelon distribution networks taking into account financial management issues and suggests a novel approach for enterprise wide management. In order to tackle this problem, it is derived a mathematical formulation combining a scheduling/planning model with a cash flow and budgeting formulation. To motivate the use of such integrated model, a sequential scheme representing traditional enterprise practices is firstly applied. Within this strategy, scheduling and planning decisions are taken firstly, and finances are fitted afterwards considering the cash flows associated to the scheduling/planning decisions previously computed as input parameters. The comparison between the results of the sequential approach and those of the integrated model highlight the advantages of the latter option, in which scheduling/planning and cash management decisions are optimized in unison with a common objective of maximizing the change in equity achieved by the company. The modeling approach developed in this paper and the obtained results suggest that a new conceptual strategy in enterprise management systems consisting of the integration of the financial models of the enterprise with those dealing with the operative area is a must to improve the firm's performance and its overall earnings and ensuring also healthy cash flow management. (c) 2005 Elsevier Ltd. All rights reserved.