• The Journal of the Institute of Internet, Broadcasting and Communication
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• v.23 no.3
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• pp.167-173
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• 2023

The cash flow matching problem(CFMP) aims to minimize the initial investment by paying the total amount due for the T-year in principal and interest of bonds or bank deposits without paying the full amount in cash. Linear programming(LP) is the only known way to solve CFMP. The linear programming method is a problem that optimizes T linear functions, and it cannot be solved by handwriting, so LINGO, which is a solution to the linear programming method, is used. This paper proposes an algorithm that obtains the solution of CFMP solely by handwriting without the help of LINGO. The proposed algorithm determines the amount of bond purchases by covering payments until the previous year of the next maturity bond in the order that the maturity date falls from the longest to the short term. In addition, until the year before the maturity of the shortest maturity bond, the amount of deposit covered by the principal and interest of the bank deposit was determined. As a result of applying the proposed algorithm to two experimental data, it was shown that more accurate results can be obtained compared to the linear programming method.