Executive summary

The Polyurethane is a largest division of a middle sized chemical company and primarily manufacturer of the chemicals use in the production of Polyurethane form. Mr. Thomas Charles is a manager who performs many functions in the polyurethane company like, Assisting in credit management, Managing accounts receivables, Reporting cash, Forecasting cash, Assisting the accounting department in computing break even points, Performing accounting functions, Helping the firm’s planning department with statistical analysis. Mr. Charles had fallen in problem with cash flow forecasting so, after getting suggestions from his friend he applied a new approach which is called Miller Orr Model for managing daily cash flows. Here we can how the he tested the applicability of this new approach through different tests and this created a new opportunity for him to discover a new approach this is appropriate for his firm to manage the daily cash and eventually cut down the cost and thus becoming the most advantageous strategy for the management of daily cash flows of the company.

Introduction

The Miller Orr model (Miller and Orr, 1966) for money administration is the change on Baumol's monetary request quality model (EOQ) system in critical ways. Mill operator and Orr begin with the presumption that the firm has two types of benefits: money and attractive securities. The model takes into consideration trade equalization development out both positive and negative headings and its can express the ideal money parity as a scope of qualities, as opposed to a solitary point gauge. This makes the model particularly helpful for firms with capricious everyday band inflows and outpourings. While the Miller-Orr Model is a critical over the EOQ model, it too makes a few presumptions. The most vital is that money streams are arbitrary, which is numerous cases is not totally legitimate, Under specific circumstances and specific times of the year sequential periods money streams might be subordinate upon each other, the unpredictability of net money streams might pointedly expand, Orr money parities might show a positive pattern. The repetition and degree of these occasions will influence the Miller-Orr model's adequacy. Real tests utilizing every day money streams for different firms demonstrate that the model minimized money holding costs as wells as or superior to the natural choices of these company's budgetary chiefs. Be that as it may, different studies have appeared than basic general guidelines have performed pretty much also. Still, the Miller Orr Model is important as a result of the understanding to offers concerning the powers that impact a company's ideal money parity

Management of the company

The company polyurethane is a middle sized firm. Here the managers are responsible for managing several jobs since there is a lack of manpower which otherwise in a larger firm would be handled by specialists.

Here Thomas Charles who as an undergraduate degrree and MBA under his belt from Larger land grant university is also the company's assistant creadit managerm accounts receivable manager, cash reporter and cash forecaster. Not only that he assisted the accounting department to compute the break even points and aso . this shows how much stress the employees have to handle each and every single day which can be solved easily by hiring new specialist particularly for that field