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USING A LATE‐START RESOURCE‐CONSTRAINED PROJECT SCHEDULE TO IMPROVE PROJECT NET PRESENT VALUE *
Author(s) -
SmithDaniels Dwight E.,
Aquilano Nicholas J.
Publication year - 1987
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1987.tb01550.x
Subject(s) - critical path method , schedule , heuristics , net present value , duration (music) , computer science , maximization , project management , operations research , scheduling (production processes) , earned value management , resource leveling , resource (disambiguation) , project planning , operations management , mathematical optimization , resource allocation , production (economics) , mathematics , economics , engineering , systems engineering , art , computer network , literature , project charter , macroeconomics , operating system
Although literature on the achievement of monetary objectives in a resource‐constrained project environment is limited, the maximization of project net present value (NPV) is an important criterion of project success. This paper presents a procedure for developing a late‐start resource‐constrained project schedule using the critical path method‐material requirements planning. Using an extensive set of problems from the literature, we show that this procedure yields a higher NPV and lower average duration than schedules derived with heuristics that schedule each activity as early as possible. In addition, while the late‐start schedule on average was significantly longer than the optimal‐duration resource‐constrained schedule, no significant difference occurred in the average NPVs of the two scheduling methods.