Budget planning with linear programming model in the consumption sector and an application

Preparing a balance sheet and organizing records in accordance with the functioning of the accounts is very important in order to follow the financial situation.There are many examples of how a financial strategy focused solely on profitability is insufficient in the real sector. Having your balance sheet under control gives important clues about the potential of your business and cash management. For example, in terms of cash management, it is desirable that the term of purchasing goods/services be longer than your term of income collection so that the need for different financing instruments in cash management can be reduced. As a result of the need arising from this, in this study, an example of the contribution of the business to cash and balance sheet management in areas where linear programming models are applied has been studied. In this study, the beginning of the period balance sheet of a food business operating in the fast moving consumer sector was taken as basis, and by determining the targets and constraints of the business in terms of production, cash management and liquidity ratios, it was tried to reach the balance sheet movement amounts during the period that would maximize the company's equity increase and reach the optimum end-of-period balance sheet. Decision variables were subjected to sensitivity analysis and the optimum end-of-period balance sheet was analyzed and interpreted with the help of financial ratios.