Optimization of net present value of total net profits of client and contractor in payments of client to contactor by the use of hybrid genetic algorithm

Abstract

Regarding the economic effects of payments due time of clients on contractors and on both parties benefits, this paper intends to provide a new model of optimization for specifying any payment dates of client to contractor for increasing total net present value (NPV) and performing activities with different methods. The problem has been defined on an activity on arc (AOA) network. Upon specifying the rates of payments on the accidents (ties), as the entrance, the presented model may provide a suitable time table of activities and also payment due times in which total NPV would be increased for client and contractor. First, the problem was formulated by using a nonlinear model that is strongly NP-hardness especially for large-sized problems. We have used two heuristic and meta-heuristic algorithms for solving it; the applied heuristic algorithm is a complete accounting algorithm and meta-heuristic one as a hybrid genetic algorithm. The results of applied problems show that all obtained results out of hybrid genetic algorithm in great and even middle problems are more efficient than complete counting algorithm. Key words: Net present value (NPV), hybrid genetic algorithm, client, contractor.