Expanded model of the project portfolio selection problem with divisibility, time profile factors and cardinality constraints

Abstract

This paper develops a new model for project portfolio selection over a planning horizon with multiple time periods. The model considers the divisibility of projects and combines reinvestment, set-up cost, cardinality constraints and precedence relationship in the scheduling, simultaneously. For efficient computation, an equivalent mixed integer linear programming representation is provided. One numerical example with three scenarios is given to highlight the capability and characteristics of the proposed model.

Expanded models of the project portfolio selection problem with learning effect

“…Besides, for different considerations and demands, some real‐life factors, such as project scheduling, resource allocation, reinvestment, and project risks are considered to select the most profitable project portfolio. It is worth pointing out that Li et al (2014) [2] introduced the concept of ‘project interruption (divisibility)’ into the project portfolio selection, where each candidate project can be partitioned into several sub‐sections in different time periods. They assumed that the execution time of every sub‐section of the project is the same.…”

Customizing Modern Portfolio Theory for the Project Portfolio Selection Problem

“…However, because resources are limited, selecting the most appropriate set of projects is a strategic organizational decision (Ghasemzadeh, Archer, & Iyogun, 1999). Accordingly, project portfolio selection problem (PPSP) determines the subset of projects to be funded to optimize organizational performance objective without violating indispensable constraints (Li, Fang, Tian, & Guo, 2015;Lorie & Savage, 1955;Shou, Xiang, Li, & Yao, 2014). Whereas the portfolio's return is considered by the literature as the most important corporate goal to be maximized, an effective organization's portfolio should also be examined by its risk.…”

A new effective dynamic program for an investment optimization problem

“…x j ≤ A and the total profit n j:=1 f j (x j ) is maximized. Closely related problems do not only exist in the area of project investment [13], but also in warehousing, economic lot sizing, etc. [14,15].…”