Optimization of project cash flow under uncertainty by Genetic algorithm

Document Type: Original Article

Authors

1 Professor of Industrial Engineering at the Dept. of I.E., Faculty of Industrial & Systems Engineering, Tarbiat Modares University,Tehran, Iran.

2 MSc Graduate of Industrial Engineering at the Dept. of Socio-economic Systems, Faculty of Industrial & Systems Engineering, Tarbiat Modares University, Tehran, Iran.

3 MSc Graduate of Information Technology Engineering at the Dept. of I.T., Faculty of Industrial & Systems Engineering, Tarbiat Modares University, Tehran, Iran.

Abstract

Optimization of project cash flow is an important problem in project management. On the other, the majority of projects will occur under uncertainty which makes it harder to manage projects. Accordingly, this paper are going to solve optimization of project cash flow problem under uncertainty. The main hypothesis in this paper is that inputs and outputs of the project can be evaluated in terms of project cash flow. Therefore, the performance goals of project that are an investment project construction are defined in three levels: time, cost and profit. Furthermore, a mathematical model is defined. In this model, the objective function maximizes the present value of project cash flow. Then, after adding the constraints, the model is solved by Genetic algorithm. Finally, to consider the risks of the project, the scenario-based approach is used by considering several executive positions for each of activities. It is believed that the proposed approach may also be useful for both managing of project cash flow and for project control.

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