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A scatter search procedure for maximizing the net present value of a project under renewable resource constraints

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  • Vanhoucke, M.

    (Vlerick Leuven Gent Management School)

Abstract

In this paper, we present a meta-heuristic algorithm for the well-known resource-constrained project scheduling problem with discounted cash flows. This optimization procedure maximizes the net present value of project subject to the precedence and renewable resource constraints. The problem is known to be NP-hard. We investigate the use of a enhanced bi-directional generation scheme and a recursive forward/backward improvement method and embed them in a meta-heuristic scatter search framework. We generate a large dataset of project instances under a controlled design and report detailed computational results. The solutions and project instances can be downloaded from a website in order to facilitate comparison with future research attempts.

Suggested Citation

  • Vanhoucke, M., 2006. "A scatter search procedure for maximizing the net present value of a project under renewable resource constraints," Vlerick Leuven Gent Management School Working Paper Series 2006-40, Vlerick Leuven Gent Management School.
    • Handle: RePEc:vlg:vlgwps:2006-40
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    References listed on IDEAS

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    1. Marti, Rafael & Laguna, Manuel & Glover, Fred, 2006. "Principles of scatter search," European Journal of Operational Research, Elsevier, vol. 169(2), pages 359-372, March.
    2. Kolisch, R. & Padman, R., 2001. "An integrated survey of deterministic project scheduling," Omega, Elsevier, vol. 29(3), pages 249-272, June.
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    4. Padman, Rema & Smith-Daniels, Dwight E., 1993. "Early-tardy cost trade-offs in resource constrained projects with cash flows: An optimization-guided heuristic approach," European Journal of Operational Research, Elsevier, vol. 64(2), pages 295-311, January.
    5. Mario Vanhoucke & Erik Demeulemeester & Willy Herroelen, 2001. "On Maximizing the Net Present Value of a Project Under Renewable Resource Constraints," Management Science, INFORMS, vol. 47(8), pages 1113-1121, August.
    6. Yang, Kum Khiong & Tay, Lee Choo & Sum, Chee Chuong, 1995. "A comparison of stochastic scheduling rules for maximizing project net present value," European Journal of Operational Research, Elsevier, vol. 85(2), pages 327-339, September.
    7. Robert A. Russell, 1986. "A Comparison of Heuristics for Scheduling Projects with Cash Flows and Resource Restrictions," Management Science, INFORMS, vol. 32(10), pages 1291-1300, October.
    8. Rema Padman & Dwight E. Smith‐Daniels & Vicki L. Smith‐Daniels, 1997. "Heuristic scheduling of resource‐constrained projects with cash flows," Naval Research Logistics (NRL), John Wiley & Sons, vol. 44(4), pages 365-381, June.
    9. 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.
    10. Christoph Schwindt & Jürgen Zimmermann, 2001. "A steepest ascent approach to maximizing the net present value of projects," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 53(3), pages 435-450, July.
    11. De Reyck, Bert & Herroelen, willy, 1998. "A branch-and-bound procedure for the resource-constrained project scheduling problem with generalized precedence relations," European Journal of Operational Research, Elsevier, vol. 111(1), pages 152-174, November.
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    Cited by:

    1. M. Vanhoucke, 2007. "A genetic algorithm to investigate the trade-off between project lead time and net present value," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 07/456, Ghent University, Faculty of Economics and Business Administration.

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    Keywords

    Resource-constrained project scheduling; Net present value; Scatter search;
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