Project network models with discounted cash flows: a guided tour through recent developments

Project network models with discounted cash flows: a guided tour through recent developments

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Article ID: iaor19991157
Country: Netherlands
Volume: 100
Issue: 1
Start Page Number: 97
End Page Number: 121
Publication Date: Jul 1997
Journal: European Journal of Operational Research
Authors: , ,
Keywords: financial
Abstract:

The vast majority of the project scheduling methodologies presented in the literature have been developed with the objective of minimizing the project duration subject to precedence and other constraints. In doing so, the financial aspects of project management are largely ignored. Recent efforts have taken into account discounted cash flows and have focused on the maximization of the net present value (npv) of the project as the more appropriate objective. In this paper we offer a guided tour through the important recent developments in the expanding field of research on deterministic and stochastic project network models with discounted cash flows. Subsequent to a close examination of the rationale behind the npv objective, we offer a taxonomy of the problems studied in the literature and critically review the major contributions. Proper attention is given to npv maximization models for the unconstrained scheduling problem with known cash flows, optimal and suboptimal scheduling procedures with various types of resource constraints, and the problem of determining both the timing and amount of payments.

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