The effect of exchange rate fluctuations on financial and physical flow in a global supply chain

A direct impact of financial resources on how to make decisions in all levels has led to modeling and optimizing financial flows in supply chains in last years. Also, considering the development of global markets and the move of companies towards globalization, the study of financial factors in this area has importance. The purpose of this research is to develop a MILP model with simultaneous focusing on financial and physical flows in a global supply chain. The main innovation of this research is the financial and physical flow integrated optimization in a global chain, which so far has not been studied in the financial literature. In this study, the effect of exchange rate fluctuations on financial variables and a total profit of the chain has been investigated. to show the model's efficiency, a sample problem and random data are used. The results indicate that an increasing exchange rate by 0.1 unit, will increase about six percentage of profit. Also, the exchange rate fluctuations cause significant changes in financial factors.