Modelling financial flow of the supply chain

Many works have been done on the product flow of the supply chain whereas there is a little research works on the financial aspect of the supply chain. Moreover, bullwhip effect like lead time is usually considered on the product flow of the supply chain and no literatures review this effect on the cash flows. In this paper, the flow of cash in a supply chain is considered from the manufacturer point of view who receives money from its customers and makes payment to the suppliers. A stochastic model to maximise firm’s profit and to find the best strategy of paying payment is developed. Furthermore, we investigate the effect of late payment on the firm’s profit within the supply chain. Finally, the effect of logistic bullwhip on the cash flow and firm’s profit is investigated