Workforce planning and financing on a production/capital discrete-time model

Traditionally, companies have considered production planning and financial commitments separately. Production planning involves planning when to produce how much of a product, while the financial commitment considers which loans to take and how to repay them. In the current difficult financial environment with new challenges and with different opportunities, such as short‐term flexible loans for paying salaries, these related problems must be considered together. In this paper, we model the two processes (production and cash flows) in a single framework, using a mixed‐integer programming discrete‐time formulation. When taken individually, each of the problems has been thoroughly discussed in the literature, while the combined version that also incorporates labor financial costs and workforce sizing is more scarce. The main contribution of the paper involves new strategies for financing labor costs in strong agreement with the company's production plan and financial commitments. The new strategy relates credit ceiling with employment funding, using a sequence of flexible short‐term loans. We consider applications and propose mathematical programming based tools that can be used by companies’ managers for conducting their own solutions analysis, following their own findings and discussion of alternative scenarios.