Using discounted cash flow heuristics to improve project net present valve

Pinder, Jonathan P.; Marucheck, Ann

doi:10.1016/0272-6963(96)00003-4

Cited by 35 publications

(23 citation statements)

References 18 publications

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“…However, those procedures do not apply to a problem with predefined milestones. They are applied to RCPSPDCF models, in which activities are ascribed outflows and/or inflows [3,[19][20][21][22]. For identifying a solution dedicated to the problem discussed, the authors propose using iterative rightshift algorithms.…”

Section: Iterative Right-shift Algorithmsmentioning

confidence: 99%

Heuristics for project scheduling with discounted cash flows optimisation

Klimek¹,

Łebkowski²

2015

Bulletin of the Polish Academy of Sciences Technical Sciences

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Abstract. The article presents the resource-constrained project scheduling problem with the maximisation of discounted cash flows from the contractor's perspective: with cash outflows related to starting individual activities and with cash inflows for completing project stages (milestones). The authors propose algorithms for improving a forward active schedule by iterative one-unit right shifts of activities, taking into account different resource flow networks. To illustrate the algorithms and problem, a numerical example is presented. Finally, the algorithms are tested using standard test problems with additionally defined cash flows and contractual milestones.

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Section: Iterative Right-shift Algorithmsmentioning

confidence: 99%

Heuristics for project scheduling with discounted cash flows optimisation

Klimek¹,

Łebkowski²

2015

Bulletin of the Polish Academy of Sciences Technical Sciences

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“…Current research on project scheduling with NPV maximisation has not covered the so defined a problem. The problems covered rather include the assignment of cash outflows and/or inflows to individual activities (Baroum & Patterson, 1996;Icmeli & Erenguc, 1996;Pinder & Marucheck, 1996;Mika et al, 2005;Selle & Zimmermann, 2003;Ulusoy &Özdamar, 1995;Vanhoucke et al, 2001;Vanhoucke, 2006). For such problems, algorithms are sought for that would maximise the project's NPV by scheduling activities, with cash inflows as soon as possible, and those with cash outflows as late as possible.…”

Section: Two-phase Algorithm Of Project's Npv Maximisationmentioning

confidence: 99%

A Two-Phase Algorithm for a Resource Constrained Project Scheduling Problem with Discounted Cash Flows

Klimek

Łebkowski

2013

DMMS

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Abstract. This paper presents a Resource-Constrained Project Scheduling Problem (RCPSP) settled by contractual milestones. The criterion analysed here is the maximisation of aggregate discounted cash flows from the contractor's perspective, known as an RCPSP problem with Discounted Cash Flows (RCPSPDCF). The cash flows analysed here cover the contractor's cash outflows (negative cash flows), related to the commencement of individual activities, and cash inflows (positive cash flows) after the fulfilment of individual milestones. The authors propose a two-phase algorithm for solving the problem defined. In the first phase, the simulated annealing metaheuristics is used, designed to identify a forward schedule with as high total DCF as possible. In the second phase, the best first-phase schedule is improved by right shifts of activities. To this end, the procedure which iteratively shifts tasks by one unit is applied, with a view to maximising the objective function. Activity shifts take into consideration precedence and resource constraints, and they are performed for a specified resource allocation to activities. This paper also includes an analysis of the problem for a sample project. The results of computational experiments are then analysed. The experiments were run with the use of standard test problems from the Project Scheduling Problem LIBrary (PSPLIB), with additionally defined cash flows and contractual milestones.

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“…A large number of different priority rules have been examined in the literature for resourceconstrained project scheduling problems with discounted cash flows (see, for example, [24], [32], and [33]). We list three priority rules derived from rules for the serial generation scheme which mostly provide "good" schedules for RCNPVP using the bidirectional approach (compare Section 5):…”

Section: Bidirectional Approachmentioning

confidence: 99%

“…The basic procedure is enhanced by a shifting procedure which right-shifts activities with negative cash flow and left-shifts activities with positive cash flow. Finally, [24] and [33] compare different priority rules in a comprehensive experimental performance analysis. In particular, rules based on the dual prices and start times of activities of an optimal solution to the corresponding resource relaxation, rules based on cash flow weights, and common rules like the minimum slack rule are considered.…”

Section: Bidirectional Approachmentioning

confidence: 99%

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A bidirectional heuristic for maximizing the net present value of large‐scale projects subject to limited resources

Selle¹,

Zimmermann²

2003

Naval Research Logistics

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Abstract:We consider the scheduling of large-scale projects to maximize the project net present value given temporal and resource constraints. The net present value objective emphasizes the financial aspects of project management. Temporal constraints between the start times of activities make it possible to handle practical problem assumptions. Scarce resources are an expression of rising cost. Since optimization techniques are not expedient to solve such problems and most heuristic methods known from literature cannot deal with general temporal constraints, we propose a new bidirectional priority-rule based method. Scheduling activities with positive cash flows as early and activities with negative cash flows as late as possible results in a method which is completed by unscheduling techniques to cope with scarce resources. In a computational experiment, we compare the well-known serial generation scheme where all activities are scheduled as early as possible with the proposed bidirectional approach. On the basis of a comprehensive data set known from literature containing instances with up to 1002 activities, the efficiency of the new approach is demonstrated.

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Using discounted cash flow heuristics to improve project net present valve

Cited by 35 publications

References 18 publications

Heuristics for project scheduling with discounted cash flows optimisation

Heuristics for project scheduling with discounted cash flows optimisation

A Two-Phase Algorithm for a Resource Constrained Project Scheduling Problem with Discounted Cash Flows

A bidirectional heuristic for maximizing the net present value of large‐scale projects subject to limited resources

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