Optimization on the Financial Management of Construction Companies with Goal Programming Model

Abstract

Financial management is important for the construction sector, as construction companies contribute to the development of countries. Malaysia encourages the construction sector to develop advanced infrastructure related to transport and housing. Financial management is a multi-criteria decision making (MCDM) problem, since companies have to consider multiple goals in order to make the optimal decision. Therefore, goal programming is proposed in financial management to solve optimization in MCDM problems. According to previous studies, there has been no comprehensive study conducted on optimization and comparison among the construction companies with a goal programming model. Thus, this study aims to propose a goal programming model to optimize and compare the financial management of listed construction companies in Malaysia for benchmarking purposes. Six goals of financial management, namely the total assets, total liabilities, equity, profit, earnings, and optimum management of construction companies are examined in this study. The results of this study show that the goal programming model is able to determine the optimal solution and goal achievement for each construction company. In addition, the model value can be further enhanced according to the optimal solution of the goal programming model. This study provides insights to the listed construction companies in Malaysia to identify the potential improvement based on the benchmarking and optimal solution of the goal programming model.