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Optimal Operating Policies for a Multinational Company under Varying Market Economics

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DOI: 10.4236/me.2013.411073    3,218 Downloads   4,674 Views  
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ABSTRACT

This paper proposes a mathematical programming model for Multi-National Corporations (MNCs) by considering both the flexibility of exchange rate and market price uncertainties. The results show that the factory in a host country should supply the products demanded by the home country for the next period when exchange rate decreases. The quantity of products being produced and shipped should be adjusted according to the variation of market-price. Conversely, a MNC in the host country should produce products ahead of time when exchange rate increases and must adjust quantity of production and inventories according to the variation of market-price.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

S. Chang, "Optimal Operating Policies for a Multinational Company under Varying Market Economics," Modern Economy, Vol. 4 No. 11, 2013, pp. 673-680. doi: 10.4236/me.2013.411073.

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