A production, distribution and investment model for a multinational company

Abstract

Considerable research literature exists on production planning, distribution, and investment models. In most cases they have been treated independently in an environment of low inflation rates. Unfortunately, work extending these problems to multinational companies is sparse. This paper develops an integrated production planning, distribution, and investment model for a multinational firm that produces products in different countries and distributes them to geographically diverse markets. Since multinational corporations operate in different countries under varying exchange and inflation rates, varying opportunities for investing, and differing regulations, these factors should be included in the decision process. In the modeling, the paper incorporates these factors and elicits the performance of the model through an example and discusses the results. The results indicate that the exchange rates and initial capacity levels of the firms have significant effects on the production, distribution, and investment decisions, and consequently, on the profit.