The Mathematical Model for Optimizing Accounts Receivable Financing in Production Planning: A Solution to Enhance Liquidity and Mitigate Financial Risks

Efficient management of liquidity and inventory is a critical challenge in production planning, especially for organizations aiming to optimize financial performance while mitigating risks. This study introduces a novel mathematical model that integrates accounts receivable financing into production planning. Unlike traditional models, our approach explicitly incorporates parameters such as cash inflows, advance payments, and bank discount rates, while addressing constraints related to liquidity, inventory balance, and credit limits. The objective function is designed to maximize liquidity at the end of the planning horizon, ensuring financial stability and operational efficiency. The model employs advanced optimization techniques, including linear and nonlinear programming, to provide actionable insights for decision-makers. Sensitivity analyses highlight its adaptability to dynamic market conditions, such as demand fluctuations and interest rate changes. The results demonstrate the model’s potential to reduce financial risks, improve cash flow, and optimize resource allocation across periods. This work serves as a practical framework for managers in diverse industries, offering a comprehensive solution to production planning challenges. Limitations and future research opportunities are also discussed to inspire further advancements