Vol. 5 No. 1 (2015): Vol 5, Iss 1, Year 2015
Articles

A goal programming model for working capital management

Mihir Dash
Alliance University, Bangalore, India
Rani Hanuman
Vijaya Krishna Spice Farms, Bellary, India
Published June 30, 2015
Keywords
  • Goal programming, working capital, liquidity, profitability, trade-off
How to Cite
Dash, M., & Hanuman, R. (2015). A goal programming model for working capital management. Journal of Management and Science, 5(1), 7-16. https://doi.org/10.26524/jms.2015.2

Abstract

This paper proposes a goal programming model for working capital management.Goal programming is necessary to model the working capital decision, as a balance has to be achieved between the conflicting objectives of liquidity and profitability. The model determines, for given working capital turnover and fixed assets turnover ratios, how funds should be maintained between working capital/current assets and fixed assets to achieve targeted levels of liquidity and
profitability, whilst minimizing the opportunity cost/loss of excess liquidity.

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