Financial optimisation of the scheduling for the multi-stage project

Abstract

Abstract. The paper analyses the problem of discounted cash flow maximising for the resource-constrained project scheduling from the project contractor's perspective. Financial optimisation for the multi-stage project is considered. Cash outflows are the contactor's expenses related to activity execution. Cash inflows are the client's payments for the completed milestones. To solve the problem, the procedure of backward scheduling taking into account contractual milestones is proposed. The effectiveness of this procedure, as used to generate solutions for the simulated annealing algorithm, is verified with use of standard test instances with additionally defined cash flows and contractual milestones.

Techniques of Generating Schedules for the Problem of Financial Optimization of Multi-Stage Project

“…Another proposed procedure of generating solutions dedicated to the examined problem is backward scheduling with the optimization of completion times for project stages (Klimek & Łebkowski, 2017). This procedure includes serial SGS with backward planning of activities performed for the selected completion times for the project's stages MTm iteratively shifted to the left.…”

“…Research for the PPS problem include the determination of, among others, the number of tranches, the due dates and the amounts in particular payment tranches etc. A payment schedule, optimized from the point of view of the contractor (Klimek & Łebkowski, 2015(Klimek & Łebkowski, , 2017Mika, Waligóra & Węglarz, 2005;Ulusoy, Sivrikaya-Serifoglu & Sahin 2001), less frequently from the perspective of the client (Dayanand & Padman, 2001), is searched for in PPS problems. There are also attempts to find a compromise in the form of a payment implementation plan satisfactory both for the client and for the contractor (Bahrami & Moslehi, 2013;Ulusoy & Cebelli, 2000).…”

“…Stage cash flows are examined for multi-mode RCPSP (He et al, 2009;He, Liu & Jia, 2012;He & Xu, 2008). The proposed optimization model for the purposes of the client's settlements with the contractor defines agreed stages (milestones) (Klimek, 2017;Klimek & Łebkowski, 2013Klimek & Łebkowski, , 2015Klimek & Łebkowski, , 2017: group of activities to be executed, due dates, the amount of payments for the execution of works as well as the amount of penalties decreasing the stage payments charged for a delayed completion of works. The proposed model with defined milestones may be useful in practice since it enables the settlement of the project depending on the degree of its completion.…”

Financial Optimization of the Resource-Constrained Project Scheduling Problem with Milestones Payments

“…For the project settlement between the client and the contractor, the bonus-penalty system [8,20,21] can be used to encourage the contractor to execute project (stages) as soon as possible. Penalties are determined for exceeding the contractual completion time of the project (stage), bonuses are given for early completion of the project (stage), etc.…”

“…Milestone events are often assigned to events such as completion of individual activity [4,19]. In this work, payments are made after the completion of the activity group as a stage of the project [8,21,25,26].…”