Underlying Decision Processes Research Articles

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

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.

Linguistic characterization of preference relations as a basis for choice in social systems

In assessing the applicability of the theories of choice to social systems, one cannot escape the fact that such systems are generally much too complex and much too ill-defined to be susceptible of analysis in precise, quantita? tive terms. For example, as discussed in [1], [2], there is considerable uncertainty in the valuation of interpersonal as well as individual utilities among a collection of individuals. Another complicating factor is that the preference relations are frequently conditioned on variables whose values are unknown or, at least, not well-defined; in addition, they may be, and frequently are, interdependent in the sense that the preference relation of an individual may be affected by his or her perception of the preference relations of other members of the collection. Furthermore, the underlying decision processes are, in most cases, multi-stage processes with poorly defined horizons, uncertain dynamics and vague constraints. These are but a few of the many considerations which suggest that, in their present form, the mathematical theories of choice may well be excessively precise in relation to the overwhelming complexity of real-world social systems. A less precise alternative to the conventional methods of quantitative analysis is provided by the so-called linguistic approach [3], [4], in which words rather than numbers are employed to characterize approximately the values of variables as well as the relations between them. As a matter of fact, we frequently resort to such characterizations in everyday dis? course, e.g., when we describe the age of an individual by a label such as young, not young, very young, not very young, etc., rather than by a number in the set U = {0, 1, 2,..., 100}. In this case, the labels in question