【正文】 am players are taken into account. To sum up, in literature there is lack of a prehensive approach for the financial management of the supply chains. Also today’s increasingly dynamic panies cannot be managed with static models. Thus, predictive integrated models that take in to account instable financial markets and also capable of ensuring required liquidity while providing timely and efficient response to orders is crucial. So, with the purpose of building a prehensive approach that embraces time and money considerations simultaneously, our study uses Cash Conversion Cycle as the decision variable with respect to which we assess the Financial Performance. By using projectscheduling methods in timing of the operations and payments, our study aims to find the optimal Cash Conversion Cycle that generates the highest accumulated cash at the end of the oneyear period. However, in our model cash inflow is probabilistic thus we don’t have control over its effect on the optimal CCC. As a result some of the values that are changed in order to find the optimal CCC are order quantity, reorder point and the Lead Time and Payable term. So our study starts with analyzing the issues affecting financial management of supply chains and then covers the related previous work that the model is built upon. In the next issues affecting the financial management in SC are discussed. In section III review of the literature is presented and in Section IV the mathematical model is presented with the objective of maximizing the accumulated net cash at the end of a oneyear period. The model considers timing of the cash inflow and outflows and Lead Time crashing costs simultaneously. Finally illustrative example and sensitivity analysis are presented followed by the conclusion part summarizing findings of the study. Bullwhip effect: It is one of most significant reasons of supply chain inefficiency. It is the amplification of demand variance as the demand information passes from the lower levels (customers) of the supply chain to the upper levels (manufacturers level). It may be severely destructive for the financial management of the supply chain as a whole, particularly the upper levels are the ones most affected. Each partner, knowing that the forecasts they retrieve from the lower partners are not one hundred percent accurate, builds safety stock. Thus the orders to the upper levels increase as more and more safety stock is built in the system, which leads the upper tiers to have an impression that the demand is more than its actual level. So longer Lead Times result in higher safety stock levels which in turn leads bigger amplifications in the upper levels as known as the Bullwhip Effect. Demand forecast: For make to stock inventory systems demand forecast is the most important aspect of production management. As cycle time increases, forecasts have to be made for farther periods, which in turn increases the forecast errors. And when the accuracy of the forecast decreases, firms are forced to keep more safety inventory and thus incur higher inventory holding cost. On the flip side of the coin, even if a firm decides to keep low inventory levels, in such a blurry environment there is high probability that it falls short in responding to customer orders which hurts the profits as much as the inventory holding costs. Thus, by shortening the supply chain cycle time the entire chain benefits from accurate demand forecast.Cost of borrowing/ investing: Cost of borrowing is another key aspect of the financial management of the supply chain. Since more interest is charged with the time elapsed over the issue date of the debt, firms should ensure collection of money from the customers as early as possible in order to pay the debts. Apparently, collection period’s primary determinant is the cycle time since the customers usually are not willing to pay before they receive the product unless some incentives such as discounts are offered in advance. Inventory holding cost: According to BenDaya and Raouf’s(1994) economic order quantity (EOQ) model, as Lead Time increases, optimal order quantity Q* increases。 therefore the average inventory held by the firm over the year, and corresponding holding cost increase. Apart from the physical cost of inventory holding, higher obsolescence cost related to higher levels of inventory should be taken into account in case of change in technology or new trends in demand. What is more, opportunity cost is another side of the inventory holding in the sense that the capital is tied to inventory rather than other moneymaking investments. Lead Time crashing cost: Firms can shorten the time needed to produce and deliver the products to customers but this can be done at a cost known as reduction or crashing cost. Lead Time vs. crashing cost graph is negative exponential (decreasing function). Crashing process starts with the longest lead (processing) time for the activities which corresponds to the least cost, then as the Lead Time is reduced the cost increases exponentially as illustrated in Figure 3. Consequently, the total Lead Time can be deposed into ponents depending on the amount invested in reducing/crashing the Lead Time.Cash to Cash cycle, which is first defined by Gitman (1974) was further examined by Gallinger (1997) as the length of the period that the firm39。s operating cycle needs to be supported by costly financing. And he adds。 “You can think of the operating cycle as the number of days sales are invested in inventories and receivables39。39。 (Gallinger, 1997). As seen from Gallinger’s definition l