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Optimal project adjustment and selection

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  • Huang, Xiaoxia
  • Xiang, Lan
  • Islam, Sardar M.N.

Abstract

These days companies are competing in a fast changing environment. To keep its competitiveness, the company needs not only to seek and select new investment opportunities but also to adjust its existing projects. This paper discusses an optimal project selection and adjusting problem under capital and land resource limitations. Due to the complex and dynamic nature of the economic environment, the project parameters such as initial outlays, upgrade expenditures and net cash flows are treated as random variables. Net present value method is employed to calculate the investment return, and a mean–variance optimal adjustment and selection model is developed. To solve the proposed optimization problem with big number decision variables, a cellular binary particle swarm optimization which hybridizes cellular automation and particle swarm optimization is proposed. As an illustration of the proposed algorithm, a numerical example is also presented.

Suggested Citation

  • Huang, Xiaoxia & Xiang, Lan & Islam, Sardar M.N., 2014. "Optimal project adjustment and selection," Economic Modelling, Elsevier, vol. 36(C), pages 391-397.
    • Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:391-397
    DOI: 10.1016/j.econmod.2013.10.004
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    References listed on IDEAS

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    4. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    5. Huang, Xiaoxia, 2007. "Optimal project selection with random fuzzy parameters," International Journal of Production Economics, Elsevier, vol. 106(2), pages 513-522, April.
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    Cited by:

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    2. Xiaoxia Huang & Liying Song, 2018. "An emergency logistics distribution routing model for unexpected events," Annals of Operations Research, Springer, vol. 269(1), pages 223-239, October.
    3. Fahime Lotfian Delouyi & Seyed Hassan Ghodsypour & Maryam Ashrafi, 2021. "Dynamic Portfolio Selection in Gas Transmission Projects Considering Sustainable Strategic Alignment and Project Interdependencies through Value Analysis," Sustainability, MDPI, vol. 13(10), pages 1-25, May.
    4. Fekri, Roxana & Amiri, Maghsoud & Sajjad, Rasoul & Golestaneh, Ramin, 2016. "Optimization of Bank Portfolio Investment Decision Considering Resistive Economy," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 11(4), pages 375-400, October.

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