Performance of the heuristic procedures for constrained projects with progress payments

All large scale resource constrained projects involve cash flows occurring during their life cycle. Several recent studies consider the problem of scheduling projects to maximise the net present value (NPV) of these cash flows. Their basic common assumption is that cash flows are mainly associated with specific events and they occur at event realisation times. An alternative assumption, which can be more realistic, is that cash inflows occur periodically, for example every month, as progress payments. This article considers the problem of maximising NPV given the alternative assumption. Three different heuristic rules are developed. The performance of these heuristic rules is analysed through a full factorial experiment with 108 scheduling conditions. The results indicate that three rules provide near-optimal schedules with respect to NPV maximisation while producing time schedules that do not delay the project completion time extensively.