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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.16 No.4 pp.524-533
DOI : https://doi.org/10.7232/iems.2017.16.4.524

Evaluation of Financial Flow Strategies in the Projects Supply Chain by Fuzzy VIKOR Method Case Study: Oil and Gas Projects in Hormozgan Province

Mehrdad Bahremand, Rasoul Karimi*
Industrial Engineering, Qeshm International Branch, Islamic Azad University, Qeshm, Iran
Department of Industrial Engineering, Noshahr Branch, Islamic Azad University, Noshahr, Iran
Corresponding Author, rasoulkarimi2005@gmail.com
20170918 20170926 20171001

ABSTRACT

One of the main challenges of the private sector of the oil industry in recent years is the cash flow problems of strategic management; problems due to lack of use of professionals in group’s major projects and not allocating Sources of funds of the bank and the National Development Fund, each year has heavier burden for the group. Financial flow management including Optimizing the flow of goods and information, financial management, supply chain finance Which should provide opportunities to improve supply chain management tools to be checked. meanwhile, The Capital market by structural weaknesses that have failed due to the lack of primary markets couldn’t support the Private sector and the result of this is , the financial inability to compete with first class and foreign contractors to participate in larger projects. Given the importance of oil and gas industry as well as the importance of the strategic management of financial flows of projects in this industry, in this study, the strategies for the management of financial flows in the supply chain projects by Fuzzy VIKOR in oil projects in Hormozgan province are discussed. So the first step is to identify and evaluate Indicators and effective factors In financial flow management of projects and the in the next steps by gathering experts by using exploratory factor analysis and confirmatory indicators that was confirmed with the help of Fuzzy VIKOR strategies Evaluation, studies are studied as alternatives.


초록


    1.INTRODUCTION

    The unpredictability of the global economy in the current situation and a variety of financial and credit risks Especially after the economic crisis of 2008 has led to widespread trade flows and financial pressures affect Not only on global buyers but also global suppliers are increasingly growing in numbers, increase in production costs in the credit and uncertainty involved in the production process And distribution of goods and services caused more attention to the issue known as Management of the Financial Supply Chain strategy (Kung et al., 2011; Bonfill et al., 2008; Swiderski et al., 2012). The most active companies in a supply chain in order to achieve long-term efficiency Of our financial systems requires an integrated and sustainable approach to liquidity management objectives that have Measurable key performance indicators that are the same systematic approach and sustainable management that Its financial supply chain has. There are usually three main challenges in the financial management of the supply chain: cost, Time and uncertainties. Although the chain design is done according to the business strategy and the competitive landscape of the industry and the vision that refers to the intensity of the relationship between physical flows is financial and informational, but Inhibition of uncertainty is mainly the most important challenges facing organizations (Abo-Sinna, and Amer, 2005; Chang et al., 2013; Fan et al., 2009; Chien and Shih, 2007). Given the importance of oil and gas projects, different methods of financial flow management projects of Oil and Gas in the world and Iran is very important and necessary. In recent years, the presence of foreign companies in the industry is reduced to a minimum, therefore attention to domestic capacities is of great importance. Lack of funds beside the loss of important technologies required and depositing important affairs to Tier 2 and 3 companies has caused oil production to decline sharply and the need for states move to sufficient internal financial flows management sector with low risks and sufficient fund is one of the issues that is strongly felt. In today’s competitive world, companies and organizations are taking advantage of technology and Management Sciences, set out to create competitive advantage through knowledge management and data management tools and optimized Organizational processes such as production or communication of the organization. One of the most important management sciences that introduces very useful topics is supply chain management.

    With utilizing these Tools, the organization will be able to develop its business relations with optimizing data exchange with business partners such as Raw material suppliers, distributors and contractors transporting goods. Thus, the firm will succeed in offering its products in far less time and it will bring down the extra cost and time of the production (Chamodrakas et al., 2009; Fawcett and Waller, 2014; Wuttke et al., 2013; Wuttke et al., 2013).

    In the traditional supply chain management studies, people considered decisions mainly from the perspective of operational management such as Capacity, inventory, order levels, pricing and etc. and the impact of financial flows Ignored in the supply chain. However, the key element of supply chain management is related to coordination of Material flows, information flows and financial flows. So operational decisions of a Company is affected by its initial investment situation. For example, with the intensification of global and international competition, many Companies faced with a shortage of capital. Limited financial capital of a company can affect Supply chain financial flows and the performance of the entire supply chain (Dağdeviren et al., 2009; Daneshvar Rouyendegh, 2011). In recent years, much research in this field has been done. Wuttke et al. (2013) examined the financial management of the supply chain. In their terms, financial management of supply chain includes optimized flow of goods, information and finance chain of Supply that management tools in order to provide opportunities to improve supply chain must be checked. Also supply chain finance management need to engage financial managers and supply chain managers within the company and also Cooperation beyond the boundaries of company providers (banks) suppliers and customers. Yalcin et al. (2012) have reviewed and assessed the financial performance of companies in Turkey. In this regard, they have chosen five key financial ratios to evaluate companies financially and weighted the financial indices using Fuzzy AHP and finally used Topsis to rank and choose companies according to their financial performance. Fuzzy VIKOR techniques in combination with DEMATEL and ANP techniques in many researches been employed. Guo et al. (2007) evaluated Performance of Graduate and Professional Study centers based on the Balanced Scorecard. In this research DEMATEL techniques were used to establish causal relationships between the four perspectives of the Balanced scorecard and ANP techniques were used to determine the relative weights of the evaluation criteria.

    Then using VIKOR techniques and utilizing the relative weights derived from the previous step we rank the suppliers. Given the importance of oil and gas industry as well as the importance of cash flow management of projects in the industry, this study proposes strategies to manage financial flows in the supply chain projects in oil projects in Hormozgan province. So the first step is Identify Indicators and effective Factors in Project’s financial flow management with the help of Fuzzy VIKOR strategies are examined as study alternatives (Singh and Acharya, 2014).

    2.OBJECTIVES AND METHODOLOGY

    The main objective of this study is to evaluate strategies to manage financial flows in the supply chain projects by Fuzzy VIKOR method. In fact, this article is complementary to another study by the same researchers. In those indicators and effective factors in choosing financial flow management strategies are proposed in the supply chain management projects. VIKOR that is based on an agreed plan of multi-criteria decision problems, evaluates problems with Disproportionate and inconsistent standards. While the decision-maker is not able to identify and express advantages of a problem in its designing and starting time, this approach can be used as an effective tool for decision making. Intended Research in oil and gas projects is done in Hormozgan province. It should be noted that this research could also be applied in all related industries. The intended time period of study is one-year that starts in 2016 and end in 2017. Society staff experts and industry professionals are studied. In the current study to determine the validity of questionnaire the professionals of the field of study were surveyed and the validity of the questionnaire was confirmed. Content validity of each Index is also examined and the resulting number was compared to the number in the LAWSHE Table (Saunders and Cornett, 2008) and all the cases of 30 indexes had the necessary content validity. By examining the reliability of survey including indexes it was observed that Cronbach’s alpha values calculated by the software SPSS is equal to 0.99. Since that the minimum of acceptable cronbach’s α must be 0.7 then the reliability of the studied questionnaire is confirmed (Saunders and Cornett, 2008; Yalcin et al., 2012).

    3.ANALYZING DATA

    3.1.Selecting the Factors and Choosing Criteria of Financial Flow Management Strategy

    The process for the preparation of the initial list of factors to select financial flow management strategy via studying articles in the relevant field, as well as consultation with the supervising professor as well as the reading the books In the field of assessment strategies, a total of 19 selected for the study. Intended cases are available in Table 1.

    3.2.Final Evaluation of Financial Flow Management Strategies Studied by Fuzzy VIKOR

    In the previous steps, performance indicators and the relative weight of these indicators were identified. In this step by using Fuzzy VIKOR a comprehensive performance evaluation on studied strategies were conducted.

    For this reason a standard VIKOR questionnaire was designed and is in the hands of experts. In this questionnaire studied unit performance is measured by indicators. Answers range from Very poor to very good. Data’s collected and aggregated and methods and procedures of Fuzzy VIKOR in order to evaluate the performance of their strategies and ranking were conducted. For this purpose, based on the relative weights of evaluation criteria derived from analysis of Fuzzy method (Table 2) and Comments aggregated about Fuzzy VIKOR is used for ranking. Summary of The results of the evaluation can be seen in Table 2 and Table 3. Also, distance of indicators from negative and positive ideal are displayed as Si, Ri in Table 4.

    Q values of S and R are also shown in Table 4. In fact, a sensitivity analysis was performed for different values of Q and Fuzzy and exact values are provided in Table 5 and Table 6.

    In Figure 1 to Figure 11 order of ranking of studied strategies according to V = 0 and V = 1 by a factor of 0.1 is displayed.Figure 2Figure 3Figure 4Figure 5Figure 6Figure 7Figure 8Figure 9Figure 10

    In previous phase, based on the relative weights of evaluation criteria derived from analysis of Fuzzy method (Table 2) and Comments aggregated about Fuzzy VIKOR is used for ranking. In this phase, the evaluation of the project’s financial planning strategies can be examined. Also, distance of indicators from negative and positive ideal are displayed as Si, Ri in Table 7.

    The final weights of the project’s financial planning strategies are shown in Table 8.

    The rank and behavior of each of the financial planning strategies of the project is shown in Figure 12 according to the method of the VIKOR.Figure 13

    Also, the distance between each indicator of the positive and negative ideals for evaluating financial exchange strategies is shown in Table 9 as values of Si,Ri.

    The final weights of the project’s financial exchange strategies are shown in Table 10.

    The rank and the behavior of each of the project’s financial exchange strategies according to the method of the VIKOR are shown in Chart 13.

    The Si, Ri values of financial control strategies are presented in Table 11.

    Also, the ranking of each of the financial control strategies of the project has been studied as the study alternatives in Table 12.

    In Figure 14, Figure 15 and Figure 16, the sensitivity analysis diagram is shown with respect to V = 1, V = 0 and V = 0.5.

    In this section using Fuzzy VIKOR studied institutions were ranked. In this study, the fair value of v in order to achieve results is considered equal to 5.0. In addition to viewing the results of this sensitivity analysis with the values 0, 1, and the growth rate of 0.1 carried out on the Q which is shown in Table 6 to Table 12. The results of the research will vary with different values of V.

    4.CONCLUSION

    In this research four groups of strategy were considered, at first six financial flow management strategies have been derived from scientific papers and after their study, we asked the company experts about the importance of it in the form of a questionnaire and then Used Fuzzy VIKOR to prioritize and evaluate the strategies and evaluation results are shown in Table 6. For example, for V = 0 where the strategy used all its weight to Allocate the maximum distance from the positive ideal, Mutual trade was recognized as the best strategy; The case is that V = 0.5, meaning that the business strategy is intended interstitial, The best strategy is Mutual trade, but in the case of V = 1, that is, when the entire weight of the average distance is from positive ideals, in this case as the best strategy suggested for managing Financial flow is Usance.

    Also, the second group reviews the strategies related to the project financial planning strategies, which for these strategies, for V = 0, in which the strategy used all the weight to allocate the maximum distance from the positive ideal; Debt Management is recognized as the best strategy; also, in the case of V = 0.5, which means that the interstitial strategy is considered, debt management is also the best strategy, even if it is V = 1, that is All weights are the mean of distance from positive ideals, debt manage- ment as the best strategy for managing the program The project is proposed.

    The third group of strategies used is related to financial transaction strategies. For V = 0, where the strategy applies all the weight to the maximum distance from the positive ideal, credit exchanges are recognized as the best strategy; also, in situations where V = 0.5 and V = 1, Credit exchanges is recommended as the best strategy for managing financial transactions.

    The latest group of strategies is related to financial control strategies. Based on the results for V = 0, in which the strategy applied all the weight to the maximum distance from the positive ideal, the use of modern financialaccounting standards was recognized as the best strategy; the result for the Various values of V is also repeated. That is, for all values of V, the new financial-accounting standards are recommended as best for managing financial control. Also, the establishment of an external monitoring and evaluation system and the correction of defective structures are also in the following order respectively. In Table 13, the most important challenges, as well as strategies appropriate to them, have been investigated.

    4.1.Limitations of the Study

    Given that the any study face limitations, the current study is No exception and has limitations and obstacles, which include the following.

    • - limited resources:

      Lack of resources of some of the variables, which interrupts the research.

    • - The inherent limitations of the questionnaire:

      Due to the fact that survey measures the people’s perceptions of the reality, this perception may be entirely inconsistent with the reality.

    • - Limitations of researchers:

      Limitation of time and expenses for researchers

    • - Participants restrictions

      Some respondents due to time constraints and busy schedule and etc were not interested in answering the questions. They also did not have a correct understanding of management concepts

    4.2.Suggestions for Future Research

    According to the results and findings of the study and evaluated cases, recommendations can be suggested for future research in connection with the evaluation of institutions. Some of the suggestions below are:

    • - Using the model to incorporate real-world constraints that exist. So that the weight of each One of the strategies to be placed as a parameter in target function and the allocation to each Institutions to be determined. In fact the proposed study should be monitored in consistent environment.

    • - to consider the concept of sustainable supply chain management in evaluating the performance of units

    • - According to the results of the research in the discussion of financing strategies, in which crosstrade was selected as the best strategy, it is suggested that in the studied industry, to develop the trade of exporters (importers), they pledge that, in the case of goods exported (imported from) to another country, or the Investor’s Institution for the provision of cash resources (capital for the purchase of equipment and production forces) and non-cash (equipment, technology, technical knowledge, etc.) required for the implementation of the project, they import(export) related goods or Unrelated to the original item. It is suggested that, based on the results of the research in the discussion of financial control, which modern financialaccounting standards were considered as the best strategies, several new financial-accounting strategies would be used.

    • - The study introduced a number of key indicators of performance evaluation in the field of proper financial flow management by using multi-criteria decision-making methods. Future research can implement identified pattern in this study in various industries, as well as develop set of indicators or combine with other analytical tools.

    Figure

    IEMS-16-524_F1.gif

    Rank of each of the strategies assuming V = 0.

    IEMS-16-524_F2.gif

    Rank of each of the strategies assuming V = 0.1.

    IEMS-16-524_F3.gif

    Rank of each of the strategies assuming V = 0.2.

    IEMS-16-524_F4.gif

    Rank of each of the strategies assuming V = 0.3.

    IEMS-16-524_F5.gif

    Rank of each of the strategies assuming V = 0.4.

    IEMS-16-524_F6.gif

    Rank of each of the strategies assuming V = 0.5.

    IEMS-16-524_F7.gif

    Rank of each of the strategies assuming V = 0.6.

    IEMS-16-524_F8.gif

    Rank of each of the strategies assuming V = 0.7.

    IEMS-16-524_F9.gif

    Rank of each of the strategies assuming V = 0.8.

    IEMS-16-524_F10.gif

    Rank of each of the strategies assuming V = 0.9.

    IEMS-16-524_F11.gif

    Rank of each of the strategies assuming V = 1.

    IEMS-16-524_F12.gif

    Ranking of each of the project’s financial planning strategies in the VIKOR method.

    IEMS-16-524_F13.gif

    Rank of each of the project’s financial exchange strategies in the VIKOR method.

    IEMS-16-524_F14.gif

    The rating chart of the financial control of the project, taking into account V = 1.

    IEMS-16-524_F15.gif

    The rating chart of the financial control of the project, taking into account V = 0.

    IEMS-16-524_F16.gif

    The rating chart of the financial control of the project, taking into account V = 0.5.

    Table

    Selected Final Factors

    Integration of expert’s opinion in the case of sub-units

    The positive and negative ideals of indicators

    Maximum distance and average distance from ideal positive values

    Q value for studied alternatives

    The sensitivity analysis on the value of v

    Values of R & S To evaluate project financial planning strategies

    Evaluation of Project’s Financial Planning Strategies

    S and R values for evaluating project finance exchange strategies

    The final weights of project’s financing strategies

    Maximum distance and mean distance from positive ideal in project’s finance control strategies

    Sensitivity analysis on v value in project’s financial control strategies

    The most important challenges and appropriate strategies

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