Payment Scheduling Problem with Multiple Modes for Activities to Maximize the Net Present Value of a Project

Abstract

In this paper, the multimode payment scheduling project is studied, which aims to maximize the net present value (NPV) of a project by deciding on payments and the start times of its activities. The problem is formulated mathematically from the point of view of the selected contractor of the project. In the proposed model, a bonus and penalty structure is considered, in which the project’s activities can be performed through different execution modes. Another interesting feature of the developed model is the possibility of switching between the execution’s modes during the implementation of each activity, which can increase the NPV. Because of the proposed model’s computational complexity, two metaheuristic algorithms are developed to tackle the underlying problem. In order to evaluate the performance of the developed algorithms, a set of 108 test instances are solved, and the computational results confirm the applicability of the solving methodologies.