Integrated supply chain network planning and financial planning respecting the imperfection of the capital market

Within supply chain networks, the integration of decisions regarding configuration, operations and financing is important to balance overall liquidity and to prevent insolvency. This applies in particular in case of a business take-over by an institutional investor, as the latter may formulate return expectations that require complete restructuring of processes. Motivated by the real-life case of a sanitary company in Germany that had to deal with the aforementioned situation, we develop a mixed-integer linear programming model that is able to coordinate planning during the investor’s engagement (limited to a specific number of years) with payouts that are structured according to his/her consumption preferences. As the investor’s scope of action is characterized by alternatives that additionally include financial investments and financings with different transaction-specific interest rates, it stands to base modeling on the premises of imperfect capital markets. The underlying coherent theory is applied to the integrated supply chain network planning and financial planning after a business take-over for the first time. Besides the exemplary analysis of a four-stage supply chain with three suppliers, plants, warehouses and markets, a numerical analysis with other randomly generated network structures is used for the validation of the model formulation. As a result, all considered instances could be solved to optimality in acceptable computation times using high-performance hardware and software.