Net present value maximisation of integrated project scheduling and material procurement planning

Abstract

A mixed-integer programming model is developed in this paper to consider simultaneous planning of project scheduling and material procurement problem as an efficient approach to improve project costs. The proposed formulation provides the model with the possibility to procure materials from a number of suppliers each offering a distinctive all-unit discount method. The purpose of the mathematical model is to develop schedules with the best net present value in order to guarantee successful completion of the project. We have applied a genetic algorithm to solve the problem, whose key factors are tuned by the Taguchi method. It is discussed how to generate initial feasible solutions as a preprocessing method to start the solution algorithm. Finally, the efficiency and applicability of the model is tested by a different set of category-based instances.