Simulation Analysis of Corporate Cash Balance Management Strategies
Abstract
Aim. This study aims to examine the practical relevance of analytical model solutions for cash balance management in the context of skipping model prerequisites. Tasks. This study develops simulation models for cash balance management with due regard to the specifics of cash balance management that are not taken into consideration in the analytical models. Methods. This study uses simulation modeling methods. Results. Simulation models for cash balance management are developed. Numerous test runs with different source data are conducted. Conclusion. Analytical solutions are far from optimal when skipping model prerequisites, but they can be used in practice. Application of such solutions is beneficial compared to strategies based on “managerial experience”. Simulation modeling makes it possible to adjust the parameters of a management strategy according to the selected critera.
References
1. Baumol W. J. The Transactions Demand for Cash: An Inventory Theoretic Approach // Quarterly Journal of Economics. 1952. Vol. 66, N 4. P. 545-556.
2. Miller M. H., Orr D. A Model of the Demand for Money by Firms // Quarterly Journal of Economics. 1966. Vol. 80, N 3. P. 413-435.
3. Orr D. Cash Management and the Demand for Money. N. Y.: Praeger Publishers, 1970. 212 p.
4. Mullins D. W., Homonoff R. B. Applications of Inventory Cash Management Models // S. C. Myers, ed. Modern Developments in Financial Management / Frederick A. Praeger, Inc. N. Y., 1976. P. 494-527.
5. Stone B. K. The Use of Forecasts and Smoothing in Control-Limit Models for Cash Management // Financial Management. Spring 1972. P. 72-84.
6. Halpern E., Orgler Y. E. An Inventory Model for Bank Vault Cash Management // Research Papers in Banking and Financial Economics - Board of Governors of the Federal Reserve System (U S.). 1975. N 5: [Электронный ресурс]. Режим доступа: http://econpapers.repec.org/paper/fipfedgbf/5.htm.
7. Финансы в вопросах и ответах: учеб. пособие / Под ред. В. В. Иванова, В. В. Ковалева. М.: Проспект, 2011. 272 с.
8. Erkki K. Cash management behavior of firms and its structural change in an emerging money market / University of Oulu. 2004. 123 p.
9. Кеменов А. В., Кузнецов Е. Н. Финансовая логистика строительных организаций // Российский экономический интернет-журнал. 2012. № 3. С. 141-152.
10. Чистяков Н. В. Составление платежного календаря с помощью имитационного моделирования // Вестник НГУ им. Ярослава Мудрого. 2006. № 37. С. 61-65.
11. Sastry A. S. R. The effect of credit on transactions demand for cash // Journal of Finance. 1970. N 25 (4). P. 777-781.
12. Аракчеев Е. А. Управление ликвидностью активов // Сборник научных трудов НГТУ. 2007. № 3 (49). С. 101-106.
Review
For citations:
Mikhaylov M.V. Simulation Analysis of Corporate Cash Balance Management Strategies. Economics and Management. 2017;(1):51-57. (In Russ.)
Views:
165
