Schedules Optimization with the Use of Value Engineering and NPV Maximization

Abstract

Construction program, spatial, architectural, and structural decisions taken in the early stages of a project have a significant impact on meeting the goals and needs of the client. The use of principles and methods of value management allows for an in-depth analysis of the project assumptions from the investor’s perspective and leads to the best ratio of the project’s utility value/sustainability to the price of its implementation. However, analysis of literature sources allows to state that optimization of the economic value of the project takes place only in the preimplementation phase of the project. This paper presents the original concept of combining issues of construction project’s utility and economic value optimization. The model enables the maximization of the utility value of the subject of the project, taking into account its economic parameters. To support the implementation of the model, a schedule optimization procedure was developed using metaheuristic algorithm. The model was demonstrated on the basis of a case study. The presented proprietary approach to optimize the construction schedule taking into account the economic and sustainability of a construction project can be used in “design and build” projects, with particular emphasis on projects managed in the sustainable Project Management system.

Identifying and Assessing Sustainable Value Management Implementation Activities in Developing Countries: The Case of Egypt

“…VM targets to accomplish the anticipated value with lower prices, without compromising the building's quality and performance [27]. VM adoption allows an in-depth evaluation of the objectives and expectations of projects from the customer or investor's perception [28].…”

Materials and Technology Selection for Construction Projects Supported with the Use of Artificial Intelligence

“…According to market research, material costs correspond to most of the construction costs [11][12][13]. What's more, the selection of appropriate materials translates into many other parameters that are crucial for the projects, including structural safety, fire safety, safety of usage, acoustical comfort, visual comfort, hygrothermal comfort, serviceability, durability, sustainability, and energy conservation [14,15].…”

“…Meanwhile, the optimization of schedules and related indicators is carried out much later. This oversight causes potential losses in the process of maximizing the value of construction projects in reference to its key economic parameters (net present value, cash flow [14,16,18]), existing conditions, and technological and organizational limitations.…”

Financial Optimization of the Resource-Constrained Project Scheduling Problem with Milestones Payments

“…For long-term projects it is recommended to take into account the change in the value of money over time, which occurs in Max-NPV (net present value maximization) models [2]. The optimization criterion of NPV maximization is the most common criterion that takes into account the financial aspects of project planning [3]. When calculating NPV, the sum of all discounted cash flows associated with the project is calculated.…”