Integrating short-term budgeting into multi-site scheduling

Abstract In this work a novel approach is applied with the aim to improve the operation of supply chains with embedded multi-purpose batch chemical plants. The major contribution of this work with respect to previous approaches is that it includes a corporate financial planning model within the mathematical formulation applied for optimizing scheduling/planning decisions variables regarding the supply chain management. Such model maximizes the change in equity of the company and provides the budgetary guidelines for the planned period. This consideration exhibits two main advantages compared to the existing methodologies. In first place, it allows to check the feasibility of the resulting planning decisions from the financial viewpoint thus ensuring that the production and distribution activities to be carried out through the different nodes of the network do not spend more cash than the available one. In second place, it leads to better overall economic performance than in previous methodologies since the model properly evaluates the impact of financial expenses and earnings derived from the SC operation thus integrating production and financial corporate decisions. Such integration also makes the difference when considering the opportunity of investing the idle cash.