A Bi-Objective Fuzzy Optimization Model for Cash Flow Optimization with an Inventory Control Approach : A Case Study in the Dairy Industry

In today’s complex financial markets, the importance of cash flow management has dramatically increased. In this regard, the present study proposes a multi-objective programming model to configure cash flow management with an inventory control approach. Minimizing the earning quality (the difference between cash flow and profit) and maximizing the difference between the sales price and inventory costs are two important model purposes. Noted, material substitution is supposed in the model to help manage the inventory value and Days Inventory Outstanding. A fuzzy model is developed to cope with uncertain parameters such as inventory costs, raw milk volume, and purchasing raw materials price. Then, a real-world case study is studied in the dairy industry located in Iran. Also, the proposed model is solved by a multi-choice goal programming method. Also, sensitivity analyses on critical parameters are performed. Finally, managerial insights and theoretical implications are proposed. Managerial insights lead business managers to choose decisions based on the company’s mission and the model’s results. In this case, absorption of more raw milk causes more contribution margin for the factory, and this feedback helps managers to plan for selling the products in different sales channels. Also, choosing to pay the suppliers’ payment on time or late with a penalty depends on the organization’s policies