HEURISTIC SCHEDULING OF RESOURCE-CONSTRAINED PROJECTS WITH CASH FLOWS

Resource-constrained project scheduling with cash flows occurs in many settings, ranging from research and development to commercial and res idential construction. Although efforts have been made to develop effi cient optimal procedures to maximize the net present value of cash flo ws for resource-constrained projects, the inherent intractability of t he problem has led to the development of a variety of heuristic method s to aid in the development of near-optimal schedules for large projec ts. This research focuses on the use of insights gained from the solut ion of a relaxed optimization model in developing heuristic procedures to schedule projects with multiple constrained resources. It is shown that a heuristic procedure with embedded priority rules that uses inf ormation from the revised solution of a relaxed optimization model inc reases project net present value. The heuristic procedure and nine dif ferent embedded priority rules are tested in a variety of project envi ronments that account for different network structures, levels of reso urce constrainedness, and cash-how parameters. Extensive testing with problems ranging in size from 21 to 1000 activities shows that the new heuristic procedures dominate heuristics using information from the c ritical path method (CPM), and in most cases outperform heuristics fro m previous research. The best performing heuristic rules classify acti vities into priority and secondary queues according to whether they le ad to immediate progress payments, thus front loading the project sche dule. (C) 1997 John Wiley & Sons, Inc.