Article ID: | iaor19971333 |
Country: | United States |
Volume: | 14 |
Issue: | 3 |
Start Page Number: | 209 |
End Page Number: | 227 |
Publication Date: | Sep 1996 |
Journal: | Journal of Operations Management |
Authors: | Patterson James H., Baroum Sami M. |
Keywords: | financial |
The authors describe in this paper the development of heuristic procedures for obtaining improved solutions to the maximization of net present value in a network problem. Optimization techniques have not been successful in solving this limited resource problem for large projects. As a result, rule-of-thumb heuristic approaches have historically been used to improve the financial returns from project activity. The heuristic procedures the authors describe assign weights to activities based upon the cumulative cash flows for the activity and all of its logical successors. Subsequent application of multi-pass