Deterministic cash flow management: State of the art and research directions

Abstract

Cash flow management has attracted the increasing attention of both academicians and practitioners in recent time. There is increasing emphasis on cash management as a vital organizational function and evidence indicates that the role and responsibilities of cash managers are expanding beyond conventional boundaries. In an earlier article, Gregory presented an excellent review of a limited class of cash management models. This paper attempts to review the rather large body of deterministic cash flow models that were not reviewed by Gregory. The review places the models in proper perspective by identifying the underlying decision processes and points out the somewhat narrow focus of these models. A modified taxonomy of cash management decisions is suggested as a possible framework for future research. The paper also recognizes the tremendous growth in information and computer technology and its implications for normative modeling efforts in cash management.