Optimal Operating Policies for a Multinational Company under Varying Market Economics

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.