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Optimal enterprise cash management under uncertainty

  • Xiao Yun Wei*
  • , Li Yan Han
  • *Corresponding author for this work
  • Beihang University

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

We present a dynamic model for enterprise cash management under uncertainty. The numerical method was used to obtain optimal level of cash holding. The results show that higher yield volatility of financial assets, liquidation cost of financial assets and coefficient of risk aversion will raise the demand for cash. It also shows that the optimal choice of inter-temporal model is different from that of single-period model. The former makes the manager choose to hold more cash. The reason is that long-horizon managers have an intrinsically larger need for cash to quell possible transaction and precautionary demand.

Original languageEnglish
Title of host publication19th International Conference on Industrial Engineering and Engineering Management
Subtitle of host publicationAssistive Technology of Industrial Engineering
PublisherSpringer Science and Business Media Deutschland GmbH
Pages825-832
Number of pages8
ISBN (Print)9783642383908
DOIs
StatePublished - 2013
Event19th International Conference on Industrial Engineering and Engineering Management: Assistive Technology of Industrial Engineering - Changsha, China
Duration: 27 Oct 201229 Oct 2012

Publication series

Name19th International Conference on Industrial Engineering and Engineering Management: Assistive Technology of Industrial Engineering

Conference

Conference19th International Conference on Industrial Engineering and Engineering Management: Assistive Technology of Industrial Engineering
Country/TerritoryChina
CityChangsha
Period27/10/1229/10/12

Keywords

  • Cash management
  • Financial assets
  • Uncertainty

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