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

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  • Thomas Selle
  • Jürgen Zimmermann

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. © 2003 Wiley Periodicals, Inc. Naval Research Logistics, 2003

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  • Thomas Selle & Jürgen Zimmermann, 2003. "A bidirectional heuristic for maximizing the net present value of large‐scale projects subject to limited resources," Naval Research Logistics (NRL), John Wiley & Sons, vol. 50(2), pages 130-148, March.
    • Handle: RePEc:wly:navres:v:50:y:2003:i:2:p:130-148
    DOI: 10.1002/nav.10052
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    1. A. S. Puryaev, 2018. "Non-economic Characteristics for the Accounting in Projects’ Appraisal," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 177-187.

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