A practical model for multiobjective, multiperiod corporate financial planning, which is based on an actual business corporation in Japan, is presented. A deviation-balancing approach based on a goal-vector concept is applied to the model corporation.
After the characteristics of typical goals in a comprehensive financial plan are discussed, the essence of the goal-vector approach and the usefulness of an L-shaped utility function, a kind of deviation-balancing model, is argued. Then mathematical formulations necessary for the planning model, including the formulations of finanacial-statement variables, goal constraints and technical constraints, are developed. The results of computer solutions under the assumption of maintaining the existing production capacity and the assumption of expanding the capacity are presented and discussed. Detailed data and some technical notes of the goal-vector approach are provided in appendices.