Integration of physical and financial decisions in value-based supply chain

Sustainable growth of a company share value, regardless of financial flow and integration of financial decisions with other physical decisions, is not reachable. Value based supply chain management, attempts to make it possible through taking working capital and fixed assets into consideration as well as factors such as sales and costs. In this paper a mixed integer programming is presented to integrate financial and physical decisions in a multi echelon, multi period and multi commodity supply chain in order to maximize economic value added, as a most prevalent value metric. Working capital management with the option of pre-buy or pre-sell as well as the credit buy or credit sell is one of the most important contributions of this paper. Performance and validation of proposed model, are proven through solving large scale problem sizes. Then, the effect of different buy and sell options, are illustrated. Company value is 64% reduced when options were not considered.