Integrating Budgeting Models into Scheduling and Planning Models(Romero et al)-03

Integrating Budgeting Models into Scheduling and Planning Models(Romero et al)-03

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Integrating Budgeting Models into Scheduling and Planning Models for the Chemical Batch Industry J. Romero, ²,‡ M. Badell, ²,‡ M. Bagajewicz, § and L. Puigjaner* Chemical Engineering Department, Universidad Polite ` cnica de Catalunya, ETSEIB, Diagonal 647, 08028 Barcelona, Spain, and School of Chemical Engineering and Materials Science, University of Oklahoma, 100 E. Boyd Street, T-335, Norman, Oklahoma 73019 This paper addresses scheduling and planning with financial management in the batch chemical process industries. A cash flow and budgeting model is coupled with an advanced scheduling and planning procedure for a specific multipurpose batch specialty chemical plant. To motivate the use of an integrated model, a sequential scheme is first solved. Hence, the scheduling and planning problem of the batch specialty chemical plant is optimized in order to fulfill the due date policy. Then, a deterministic cash management model is optimized to maximize the enterprise earnings, using the cash flows of the scheduling - planning model as parameters. As a result, owing to the fulfillment of customer requirements, the solvency of the firm changes, and hence, the funding policy is affected. The results of the sequential approach are then compared with the integrated model highlighting the advantage of the latter option. Here, production scheduling - planning and cash management are optimized in unison with a common objective of maximizing earnings. The model development made in this paper and the results suggest that a new conceptual approach in enterprise management systems consisting of the integration of the enterprise finance models with the company operations models is a must to improve the firm’s reliability and its overall earnings. 1. Introduction Most companies are based in a functional organiza- tional structure with separate departments for produc- tion, supply, logistics, service to customers, etc. At the enterprise level, most planning is done by functional area. In this situation, each functional area’s plan is sequentially considered as input to the others according to a hierarchy. In this way, software enterprise-wide systems allow information-sharing and collaboration processes, but they do not develop real integration relationships. The synchronization of the interactions between functions of a firm can be solved only if the multiple functional plans are simultaneously considered taking into account all functional constraints in unison. In this work, the optimal assignment of the most expensive limited resource, money, is considered as the common variable to integrate operations and finances functional areas. It is interesting that a simultaneous approach considering money as a limited resource is generally accepted as a method to plan jointly the supply chain activities among all the chain’s trading partners. With this aim, the supply chain planning (SCP) software systems link financial/economic perfor- mance measures within the decision making process.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/05/2011 for the course CHE 5480 taught by Professor Staff during the Spring '11 term at OKCU.

Page1 / 10

Integrating Budgeting Models into Scheduling and Planning Models(Romero et al)-03

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online