IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v213y2014i1p203-22010.1007-s10479-012-1155-9.html
   My bibliography  Save this article

Simulated annealing for financing cost distribution based project payment scheduling from a joint perspective

Author

Listed:
  • Zhengwen He
  • Nengmin Wang
  • Pengxiang Li

Abstract

Based on the distribution of the project financing cost over the contractor and the client, this paper involves the project payment scheduling problem from a joint perspective of the two parties. In the problem, the project financing cost is defined as the expense for raising money from the outside or the opportunity cost of the capital devoted into the project and the objective is to find the project payment schedule that can not only maximize the joint revenue of the two parties but also be accepted by them. Based on the characteristics of the problem, an optimization model consisting of two submodels is constructed using the activity-based method. For the strong NP-hardness of the problem, two simulated annealing algorithms with different searching structures are developed and compared with the multi-start iterative improvement method on the basis of a computational experiment performed on a data set generated randomly. The results show that the simulated annealing algorithm with the nested loop module seems to be the most promising algorithm for solving the defined problem especially when the scale of the problem becomes larger. In addition, the influences of some key parameters on the computational results are investigated through the full factorial experiment and a few useful conclusions are drawn. Copyright Springer Science+Business Media, LLC 2014

Suggested Citation

  • Zhengwen He & Nengmin Wang & Pengxiang Li, 2014. "Simulated annealing for financing cost distribution based project payment scheduling from a joint perspective," Annals of Operations Research, Springer, vol. 213(1), pages 203-220, February.
    • Handle: RePEc:spr:annopr:v:213:y:2014:i:1:p:203-220:10.1007/s10479-012-1155-9
    DOI: 10.1007/s10479-012-1155-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10479-012-1155-9
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10479-012-1155-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mika, Marek & Waligora, Grzegorz & Weglarz, Jan, 2008. "Tabu search for multi-mode resource-constrained project scheduling with schedule-dependent setup times," European Journal of Operational Research, Elsevier, vol. 187(3), pages 1238-1250, June.
    2. Shtub, Avraham & LeBlanc, Larry J. & Cai, Ziyong, 1996. "Scheduling programs with repetitive projects: A comparison of a simulated annealing, a genetic and a pair-wise swap algorithm," European Journal of Operational Research, Elsevier, vol. 88(1), pages 124-138, January.
    3. Nalini Dayanand & Rema Padman, 2001. "Project Contracts and Payment Schedules: The Client's Problem," Management Science, INFORMS, vol. 47(12), pages 1654-1667, December.
    4. Nalini Dayanand & Rema Padman, 2001. "A Two Stage Search Heuristic for Scheduling Payments in Projects," Annals of Operations Research, Springer, vol. 102(1), pages 197-220, February.
    5. Eglese, R. W., 1990. "Simulated annealing: A tool for operational research," European Journal of Operational Research, Elsevier, vol. 46(3), pages 271-281, June.
    6. Hapke, Maciej & Jaszkiewicz, Andrzej & Slowinski, Roman, 1998. "Interactive analysis of multiple-criteria project scheduling problems," European Journal of Operational Research, Elsevier, vol. 107(2), pages 315-324, June.
    7. Herroelen, Willy S. & Van Dommelen, Patrick & Demeulemeester, Erik L., 1997. "Project network models with discounted cash flows a guided tour through recent developments," European Journal of Operational Research, Elsevier, vol. 100(1), pages 97-121, July.
    8. Ulusoy, Gunduz & Cebelli, Serkan, 2000. "An equitable approach to the payment scheduling problem in project management," European Journal of Operational Research, Elsevier, vol. 127(2), pages 262-278, December.
    9. Rainer Kolisch & Arno Sprecher & Andreas Drexl, 1995. "Characterization and Generation of a General Class of Resource-Constrained Project Scheduling Problems," Management Science, INFORMS, vol. 41(10), pages 1693-1703, October.
    10. Prabuddha De & E. James Dunne & Jay B. Ghosh & Charles E. Wells, 1997. "Complexity of the Discrete Time-Cost Tradeoff Problem for Project Networks," Operations Research, INFORMS, vol. 45(2), pages 302-306, April.
    11. Koulamas, C & Antony, SR & Jaen, R, 1994. "A survey of simulated annealing applications to operations research problems," Omega, Elsevier, vol. 22(1), pages 41-56, January.
    12. Brucker, Peter & Drexl, Andreas & Mohring, Rolf & Neumann, Klaus & Pesch, Erwin, 1999. "Resource-constrained project scheduling: Notation, classification, models, and methods," European Journal of Operational Research, Elsevier, vol. 112(1), pages 3-41, January.
    13. De, Prabuddha & James Dunne, E. & Ghosh, Jay B. & Wells, Charles E., 1995. "The discrete time-cost tradeoff problem revisited," European Journal of Operational Research, Elsevier, vol. 81(2), pages 225-238, March.
    14. Viana, Ana & Pinho de Sousa, Jorge, 2000. "Using metaheuristics in multiobjective resource constrained project scheduling," European Journal of Operational Research, Elsevier, vol. 120(2), pages 359-374, January.
    15. Kolisch, Rainer & Sprecher, Arno, 1996. "PSPLIB - a project scheduling problem library," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 396, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    16. Kolisch, Rainer & Hartmann, Sönke, 1999. "Heuristic algorithms for the resource-constrained project scheduling problem: classification and computational analysis," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 10966, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    17. He, Zhengwen & Xu, Yu, 2008. "Multi-mode project payment scheduling problems with bonus-penalty structure," European Journal of Operational Research, Elsevier, vol. 189(3), pages 1191-1207, September.
    18. Weglarz, Jan & Józefowska, Joanna & Mika, Marek & Waligóra, Grzegorz, 2011. "Project scheduling with finite or infinite number of activity processing modes - A survey," European Journal of Operational Research, Elsevier, vol. 208(3), pages 177-205, February.
    19. A. H. Russell, 1970. "Cash Flows in Networks," Management Science, INFORMS, vol. 16(5), pages 357-373, January.
    20. Kolisch, R. & Padman, R., 2001. "An integrated survey of deterministic project scheduling," Omega, Elsevier, vol. 29(3), pages 249-272, June.
    21. Joanna Józefowska & Marek Mika & Rafał Różycki & Grzegorz Waligóra & Jan Węglarz, 2001. "Simulated Annealing for Multi-Mode Resource-Constrained Project Scheduling," Annals of Operations Research, Springer, vol. 102(1), pages 137-155, February.
    22. Bouleimen, K. & Lecocq, H., 2003. "A new efficient simulated annealing algorithm for the resource-constrained project scheduling problem and its multiple mode version," European Journal of Operational Research, Elsevier, vol. 149(2), pages 268-281, September.
    23. Mika, Marek & Waligora, Grzegorz & Weglarz, Jan, 2005. "Simulated annealing and tabu search for multi-mode resource-constrained project scheduling with positive discounted cash flows and different payment models," European Journal of Operational Research, Elsevier, vol. 164(3), pages 639-668, August.
    24. Joseph G. Szmerekovsky, 2005. "The Impact of Contractor Behavior on the Client's Payment-Scheduling Problem," Management Science, INFORMS, vol. 51(4), pages 629-640, April.
    25. Hartmann, Sönke & Briskorn, Dirk, 2010. "A survey of variants and extensions of the resource-constrained project scheduling problem," European Journal of Operational Research, Elsevier, vol. 207(1), pages 1-14, November.
    26. Nursel Kavlak & Gündüz Ulusoy & Funda Sivrikaya Şerifoğlu & Ş. İlker Birbil, 2009. "Client‐contractor bargaining on net present value in project scheduling with limited resources," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(2), pages 93-112, March.
    27. He, Zhengwen & Wang, Nengmin & Jia, Tao & Xu, Yu, 2009. "Simulated annealing and tabu search for multi-mode project payment scheduling," European Journal of Operational Research, Elsevier, vol. 198(3), pages 688-696, November.
    28. Jacek Błażewicz & Klaus H. Ecker & Erwin Pesch & Günter Schmidt & Jan Węglarz, 2007. "Handbook on Scheduling," International Handbooks on Information Systems, Springer, number 978-3-540-32220-7, November.
    29. Etgar, Ran & Shtub, Avraham & LeBlanc, Larry J., 1997. "Scheduling projects to maximize net present value -- the case of time-dependent, contingent cash flows," European Journal of Operational Research, Elsevier, vol. 96(1), pages 90-96, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yukang He & Tao Jia & Weibo Zheng, 2024. "Simulated annealing for centralised resource-constrained multiproject scheduling to minimise the maximal cash flow gap under different payment patterns," Annals of Operations Research, Springer, vol. 338(1), pages 115-149, July.
    2. Leyman, Pieter & Vanhoucke, Mario, 2017. "Capital- and resource-constrained project scheduling with net present value optimization," European Journal of Operational Research, Elsevier, vol. 256(3), pages 757-776.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. He, Zhengwen & Liu, Renjing & Jia, Tao, 2012. "Metaheuristics for multi-mode capital-constrained project payment scheduling," European Journal of Operational Research, Elsevier, vol. 223(3), pages 605-613.
    2. Hartmann, Sönke & Briskorn, Dirk, 2010. "A survey of variants and extensions of the resource-constrained project scheduling problem," European Journal of Operational Research, Elsevier, vol. 207(1), pages 1-14, November.
    3. Hartmann, Sönke & Briskorn, Dirk, 2008. "A survey of variants and extensions of the resource-constrained project scheduling problem," Working Paper Series 02/2008, Hamburg School of Business Administration (HSBA).
    4. He, Zhengwen & Wang, Nengmin & Jia, Tao & Xu, Yu, 2009. "Simulated annealing and tabu search for multi-mode project payment scheduling," European Journal of Operational Research, Elsevier, vol. 198(3), pages 688-696, November.
    5. Weglarz, Jan & Józefowska, Joanna & Mika, Marek & Waligóra, Grzegorz, 2011. "Project scheduling with finite or infinite number of activity processing modes - A survey," European Journal of Operational Research, Elsevier, vol. 208(3), pages 177-205, February.
    6. Yukang He & Tao Jia & Weibo Zheng, 2024. "Simulated annealing for centralised resource-constrained multiproject scheduling to minimise the maximal cash flow gap under different payment patterns," Annals of Operations Research, Springer, vol. 338(1), pages 115-149, July.
    7. Kolisch, R. & Padman, R., 2001. "An integrated survey of deterministic project scheduling," Omega, Elsevier, vol. 29(3), pages 249-272, June.
    8. Mika, Marek & Waligora, Grzegorz & Weglarz, Jan, 2005. "Simulated annealing and tabu search for multi-mode resource-constrained project scheduling with positive discounted cash flows and different payment models," European Journal of Operational Research, Elsevier, vol. 164(3), pages 639-668, August.
    9. Nursel Kavlak & Gündüz Ulusoy & Funda Sivrikaya Şerifoğlu & Ş. İlker Birbil, 2009. "Client‐contractor bargaining on net present value in project scheduling with limited resources," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(2), pages 93-112, March.
    10. Nima Zoraghi & Aria Shahsavar & Babak Abbasi & Vincent Peteghem, 2017. "Multi-mode resource-constrained project scheduling problem with material ordering under bonus–penalty policies," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(1), pages 49-79, April.
    11. Etgar, Ran & Gelbard, Roy & Cohen, Yuval, 2017. "Optimizing version release dates of research and development long-term processes," European Journal of Operational Research, Elsevier, vol. 259(2), pages 642-653.
    12. Luis F. Machado-Domínguez & Carlos D. Paternina-Arboleda & Jorge I. Vélez & Agustín Barrios-Sarmiento, 2022. "An adaptative bacterial foraging optimization algorithm for solving the MRCPSP with discounted cash flows," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 30(2), pages 221-248, July.
    13. He, Zhengwen & Xu, Yu, 2008. "Multi-mode project payment scheduling problems with bonus-penalty structure," European Journal of Operational Research, Elsevier, vol. 189(3), pages 1191-1207, September.
    14. Leyman, Pieter & Vanhoucke, Mario, 2017. "Capital- and resource-constrained project scheduling with net present value optimization," European Journal of Operational Research, Elsevier, vol. 256(3), pages 757-776.
    15. He, Yukang & Jia, Tao & Zheng, Weibo, 2023. "Tabu search for dedicated resource-constrained multiproject scheduling to minimise the maximal cash flow gap under uncertainty," European Journal of Operational Research, Elsevier, vol. 310(1), pages 34-52.
    16. Zhang, Jingwen & Elmaghraby, Salah E., 2014. "The relevance of the “alphorn of uncertainty” to the financial management of projects under uncertainty," European Journal of Operational Research, Elsevier, vol. 238(1), pages 65-76.
    17. Kellenbrink, Carolin & Helber, Stefan, 2015. "Scheduling resource-constrained projects with a flexible project structure," European Journal of Operational Research, Elsevier, vol. 246(2), pages 379-391.
    18. Van Peteghem, Vincent & Vanhoucke, Mario, 2014. "An experimental investigation of metaheuristics for the multi-mode resource-constrained project scheduling problem on new dataset instances," European Journal of Operational Research, Elsevier, vol. 235(1), pages 62-72.
    19. Grzegorz Waligóra, 2014. "Discrete-continuous project scheduling with discounted cash inflows and various payment models—a review of recent results," Annals of Operations Research, Springer, vol. 213(1), pages 319-340, February.
    20. Yangyang Liang & Nanfang Cui & Tian Wang & Erik Demeulemeester, 2019. "Robust resource-constrained max-NPV project scheduling with stochastic activity duration," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 41(1), pages 219-254, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:annopr:v:213:y:2014:i:1:p:203-220:10.1007/s10479-012-1155-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.