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The payment scheduling problem

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  • Richard C. Grinold

Abstract

Large complicated projects with interdependent activities can be described by project networks. Arcs represent activities, nodes represent events, and the network's structure defines the relation between activities and events. A schedule associates an occurrence time with each event: the project can be scheduled in several different ways. We assume that a known amount of cash changes hands at each event. Given any schedule the present value of all cash transactions can be calculated. The payment scheduling problem looks for a schedule that maximizes the present value of all transactions. This problem was first introduced by Russell [2]; it is a nonlinear program with linear constraints and a nonconcave objective. This paper demonstrates that the payment scheduling problem can be transformed into an equivalent linear program. The linear program has the structure of a weighted distribution problem and an efficient procedure is presented for its solution. The algorithm requires the solution of triangular systems of equations with all matrix coefficients equal to ± or 0.

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  • Richard C. Grinold, 1972. "The payment scheduling problem," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 19(1), pages 123-136, March.
    • Handle: RePEc:wly:navlog:v:19:y:1972:i:1:p:123-136
    DOI: 10.1002/nav.3800190110
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    Cited by:

    1. S. Selcuk Erenguc & Suleyman Tufekci & Christopher J. Zappe, 1993. "Solving time/cost trade‐off problems with discounted cash flows using generalized benders decomposition," Naval Research Logistics (NRL), John Wiley & Sons, vol. 40(1), pages 25-50, February.
    2. Peymankar, Mahboobeh & Davari, Morteza & Ranjbar, Mohammad, 2021. "Maximizing the expected net present value in a project with uncertain cash flows," European Journal of Operational Research, Elsevier, vol. 294(2), pages 442-452.
    3. Joseph G. Szmerekovsky & George L. Vairaktarakis, 2006. "Maximizing project cash availability," Naval Research Logistics (NRL), John Wiley & Sons, vol. 53(4), pages 272-284, June.
    4. Rostami, Salim & Creemers, Stefan & Leus, Roel, 2024. "Maximizing the net present value of a project under uncertainty: Activity delays and dynamic policies," European Journal of Operational Research, Elsevier, vol. 317(1), pages 16-24.
    5. Wenhui Zhao & Nicholas G. Hall & Zhixin Liu, 2020. "Project Evaluation and Selection with Task Failures," Production and Operations Management, Production and Operations Management Society, vol. 29(2), pages 428-446, February.
    6. Hermans, Ben & Leus, Roel & Looy, Bart Van, 2023. "Deciding on scheduling, secrecy, and patenting during the new product development process: The relevance of project planning models," Omega, Elsevier, vol. 116(C).
    7. Thomas Schmitt & Bruce Faaland, 2004. "Scheduling recurrent construction," Naval Research Logistics (NRL), John Wiley & Sons, vol. 51(8), pages 1102-1128, December.
    8. 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.

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