Comment on elmaghraby and herroelen's “The scheduling of activities to maximize the net present value of projects”

Sepil, Canan

doi:10.1016/0377-2217(94)90161-9

Cited by 11 publications

(6 citation statements)

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“…A computational study for this algorithm performed for 250 randomly generated projects is reported by Herroelen and Gallens in [25]. But Sepil in [57] shows by means of an elaborate example that this algorithm is flawed and may fail to find an optimal solution. Etgar et al in [17] consider a problem with an AoA network, where cash flows are associated with events.…”

Section: Literature Reviewmentioning

confidence: 99%

Simulated annealing and tabu search for multi-mode resource-constrained project scheduling with positive discounted cash flows and different payment models

Mika

Waligóra

Węglarz

2005

European Journal of Operational Research

141

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Section: Literature Reviewmentioning

confidence: 99%

Simulated annealing and tabu search for multi-mode resource-constrained project scheduling with positive discounted cash flows and different payment models

Mika

Waligóra

Węglarz

2005

European Journal of Operational Research

141

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“…As with project crashing, this led to the development of a number of computer-supported planning tools starting with the fundamental works of Russell (1970) and Grinold (1972). More evolved procedures with less restrictive assumptions are presented by Elmaghraby and Herroelen (1990), Herroelen and Gallens (1993), Sepil (1994), Etgar et al (1996), Kazaz and Sepil (1996) and De Reyck (1998). However, the possibilities of preparing a budget accordingly may considerably be restricted by contractual arrangements (cf.…”

Section: Budgetingmentioning

confidence: 99%

Scheduling of Resource-Constrained Projects

Klein¹

2000

Operations Research/Computer Science Interfaces Series

110

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“…If u * ij = w j − u jt then u * ij ≥ 0 due to (18). Otherwise, u * ij = u ij + (−w i − u si ) and u * ij ≥ 0 due to (16) and (17). In all cases u * is nonnegative.…”

Section: Lemma 1: Ifmentioning

confidence: 99%

“…Elmaghraby and Herroelen [4] proposed an algorithm to solve maxNPV. Sepil [17] shows that the algorithm of Elmaghraby and Herroelen will not always provide the optimal solution to maxNPV. In a follow-up paper, Herroelen and Gallens [9] presented a revised version of the recursive algorithm and demonstrated through computational results that the new algorithm provides the optimal solution to maxNPV; however, no formal proof of correctness is given.…”

Section: Motivation and Literature Reviewmentioning

confidence: 99%

Maximizing project cash availability

Szmerekovsky

Vairaktarakis

2006

Naval Research Logistics

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Abstract:Consider a project during the life cycle of which there are cash payouts and in-flows. To better meet his financial commitments, the project owner would like to meet all deadlines without running out of cash. We show that the cash availability objective is similar to the total weighted flowtime used to measure work-in-progress performance in the scheduling and inventory control literatures. In this article we provide several specialized solution methods for the problem of minimizing total weighted flowtime in an arbitrary acyclic project network, subject to activity release times and due dates, where the activity weights may be positive or negative and represent cash in-and out-flows. We describe the structure of an optimal solution and provide several efficient algorithms and their complexity based on mincost and maxflow formulations. © 2006 Wiley Periodicals, Inc. Naval Research Logistics 53: 272-284, 2006 Keywords: cash availability; project scheduling; network optimization; algorithms; discounting MOTIVATION AND LITERATURE REVIEWConsider the cash in-and out-flows associated with each activity of a project. Multiply each cash flow by the amount of time from the time it is committed until project completion. This product is measured in money-time. The project objective proposed in this article is the sum of these products over all cash flows associated with the activities. This sum is called cash availability. The associated optimization problem is to identify a schedule that maximizes cash availability.The notion of cash availability as a means for evaluating projects is discussed by Goldratt [6]. The author suggests cash availability as an alternative measure for financial evaluation of projects. Today the two most popular methods for evaluating projects are the Payback period and the Net Present Value (NPV).Unlike manufactured products, projects may not require storing materials at sites controlled by the project owner. This is, for instance, the case with construction projects. Such projects often involve hundreds of subcontractors. Partial payments are made to subcontractors according to bilateral agreements. Such payments are only recovered by the Correspondence to: G. L. Vairaktarakis (gxv5@weatherhead. cwru.edu) project owner upon project completion, much the same way that work-in-process costs are captured by manufacturers upon selling finished goods. Evidently, cash availability is the project equivalent of work-in-progress (WIP) inventory costs in production. A lean manufacturer wants to minimize the investment in WIP in the same way that a project owner wants to minimize the average cash amount needed throughout the lifetime of the project. WIP costs are measured using total weighted flowtime. This measure is a sum of n products, one for every job. Associated with each job i is the product of the inventory value w i committed to initiate (or complete) the job, multiplied by the length of time t i for which this amount is committed. Following the usual assumption that an order of n job...

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Comment on elmaghraby and herroelen's “The scheduling of activities to maximize the net present value of projects”

Cited by 11 publications

References 1 publication

Simulated annealing and tabu search for multi-mode resource-constrained project scheduling with positive discounted cash flows and different payment models

Simulated annealing and tabu search for multi-mode resource-constrained project scheduling with positive discounted cash flows and different payment models

Scheduling of Resource-Constrained Projects

Maximizing project cash availability

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