How Widely are Cash Management Optimization Models Used

Over the last ten years more than twenty optimization models for short-term cash management have been proposed in the professional journals in OR, finance, and economics. Short-term cash management is here defined as those activities of top or middle management executives connected with the periodic (daily or weekly) review and control of cash balances, short-term loan balances and short-term marketable security holdings. The objective is to maintain adequate cash balances to meet future disbursements, i.e., eliminate idle cash balances (e.g., by reducing short-term loans or buying treasury bills) or cover potential cash shortages (e.g., by selling treasury bills or increasing short-term loans).