Uncertain Resource-Constrained Project Scheduling Problem with Net Present Value Criterion for Risk-Averse Decision Make
On the basis of uncertainty theory, plenty of researches have been done on uncertain resource-constrained project scheduling problem (URCPSP). Instead of minimizing the makespan, in this paper, we address the maximization of net present value (NPV) of a p
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Abstract On the basis of uncertainty theory, plenty of researches have been done on uncertain resource-constrained project scheduling problem (URCPSP). Instead of minimizing the makespan, in this paper, we address the maximization of net present value (NPV) of a project’s cash flows when activity durations are assumed to be uncertain. In addition to precedence constraint and resource constraint involved in resource-constrained project scheduling problem (RCPSP), a deadline constraint is taken into account. Thus, our aim is to maximize NPV and to satisfy the deadline constraint with certain belief degree as well. Accordingly we adopt chance-constrained programming and utilize a revised estimation of distribution algorithm (EDA) to solve this problem. In this way we present NPV criterion for project decision makers who are risk-averse. Keywords Project scheduling ⋅ Uncertainty theory ⋅ Net present value ⋅ Chanceconstrained programming ⋅ Estimation of distribution algorithm
1 Introduction There have been many survey papers in the area of project scheduling in recent years. Project scheduling is to assign activity starting times according to scheduling objectives, such as minimal project makespan, minimal project cost, etc. [1]. These papers have primarily emphasized on modeling and algorithmic contributions for specific classes of project scheduling problems, such as net present value (NPV) maximization and makespan minimization, with and without resource constraints [2]. Most of the literature on project scheduling focuses on arranging activities in such a way that the project makespan is minimized. This objective may be unsuitable for capitalintensive IT and construction projects, where large amounts of money are invested over long periods of time. In such environments, the wise coordination of cash flows C. Zhao ⋅ H. Ke (✉) School of Economics and Management, Tongji University, Shanghai 200092, China e-mail: [email protected] © Springer Science+Business Media Singapore 2017 X. Li and X. Xu (eds.), Proceedings of the Fourth International Forum on Decision Sciences, Uncertainty and Operations Research, DOI 10.1007/978-981-10-2920-2_48
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crucially affects the profitability of a project. This suggests that in such situations, financial aspects should be at the center of decision makers’ attention. A project’s financial benefit is measured by its NPV, which is determined by discounting all arising cash flows to the start time of the project. In other words, the NPV can be regarded as the cash equivalent of undertaking the project. In reality, contractors sign contracts with clients to define ways of receiving payments linked with progress of related activities. Thus, different contracts lead to different time points of payments and cash flows vary correspondingly. In this paper, we assume that contractors only receive payments when related activities complete. For instance, when a construction company undertakes a project which consists of lots of activities funded by the party A, it seems unreasonable
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