Project network models with discounted cash flows. A guided tour through recent developments.

The vast majority of the project scheduling methodologies presented in the literature have been developed with the objective of minimizing the project duration subject to precedence and other constraints. In doing so, the financial aspects of project management are largely ignored. Recent efforts have taken into account discounted cash flow and have focused on the maximalization of the net present value (npv) of the project as the more appropriate objective. In this paper we offer a guided tour through the important recent developments in the expanding field of research on deterministic and stochastic project network models with discounted cash flows. Subsequent to a close examination of the rationale behind the npv objective, we offer a taxonomy of the problems studied in the literature and critically review the major contributions. Proper attention is given to npv maximization models for the unconstrained scheduling problem with known cash flows, optimal and suboptimal scheduling procedures with various types of resource constraints, and the problem of determining both the timing and amount of payments.Scheduling; Models; Model; Discounted cash flow; Cash flow; Project scheduling; Project management; Management; Net present value; Value; Problems; Maximization; Optimal;

Designing Optimal Routes for Cycle-tourists

AbstractBicycles are becoming an increasingly popular mean of transport. Being healthy and affordable, they provide a sustainable alternative way of movement, for both leisure and work commuting. In both cases demand increases when bike devoted tracks are available. Providing bike trails that connect touristic spots is a cheap way of increasing the appeal and promoting the development of those regions featuring beautiful landscapes, strong cultural traditions, and historical monuments within a small area. This is the case of the Trebon region, South Bohemia, whose local administrators face the problem of optimally investing scarce resources to set up a network of cycle-dedicated tracks, exploiting existing trails or by reconstruction works, turning gravel roads or unsurfaced forest tracks into paved bike trails. As a first step, we address the design of a single route, modeled as a path on a directed graph between two given nodes, maximizing a utility function related to the attractiveness of the path. Attractiveness depends on several features, such as a service facility, a restaurant serving typical food, an historical village, or a scenic landscape to be enjoyed along the way. Two kinds of resource constraints bound the solution. A path maximum duration, which depends on how many times each arc is traversed, and a maximum budget for setting up the infrastructure, which depends on which arcs are selected. Since a cyclist may be willing to traverse an edge more than once - think, for example, of a detour from the main way to be travelled back and forth to reach a point of interest – cycles can be part of the route. The attractiveness function is concave and decreases after reaching its maximum at a few traversals. Such features make the problem new and challenging. We present an integer linear programming model and validate it by an experimental campaign on realistic data for the Trebon region

The N-K Problem in Power Grids: New Models, Formulations and Numerical Experiments (extended version)

Given a power grid modeled by a network together with equations describing the power flows, power generation and consumption, and the laws of physics, the so-called N-k problem asks whether there exists a set of k or fewer arcs whose removal will cause the system to fail. The case where k is small is of practical interest. We present theoretical and computational results involving a mixed-integer model and a continuous nonlinear model related to this question.Comment: 40 pages 3 figure

Keystone sector methodology:a network comparative study

Within neoclassical economic growth approaches there is no fully satisfactory explanation for regional asymmetric growth. More recent extensions of the neoclassical model (new endogenous growth theories) recognise the possible influence of a set of intangible factors, which, nevertheless, do not allow a treatable empirical formalisation. Neo- institutional and evolutionary theories highlight the complex nature of economic growth, recognising the difficulty of non-linear dynamic modelling; however, both theories highlight the influential role played by innovation and technology diffusion processes. Missing from these theories is any appreciation of the social network characteristics of regions and the interaction between social and economic systems in conditioning the growth and development processes. In the present PhD thesis, we take the institutional network in small towns as the unity for analysis where information, money and support flows among them are studied. We apply a social network analysis framework, which allow us to find numerical indicators for the whole network as for each individual institutional role in it. Applying this framework in two case studies (in Portugal and in the USA) we found a set of interesting differences about the institutional mediation roles. While in the US, the private sector leaded by banks plays the keystone sector role, in Portugal, we still have public institutions as the main players. After the identification of the significant variables and attending to the different results in the two studies, we built a testable cross-section model that, controlling for proximity from urban centre, transportation costs, local factor endowments, amenities and so forth, can be tested using a broader database, to correlate town economic performances with the network identified variables. The deep understanding of the relational structure within these small towns makes it possible to quantify a set of crucial intangible variables that, acknowledged in a regional policy design, will contribute to increase its efficiency. Without a complete understanding of these social network structures, it is possible that current EU criteria used to define regions eligible for assistance may be inadequate. At the present time, the criteria for receipt of regional development funds are based on relative (to EU average) per capita levels and do not explore differences in economic potential or the capacity for regions to develop. Part of this capacity is rooted in the social network structure. Further on-going research will contribute to the deepening of neoclassical growth models, complementing considerations that evolutionary economics uses to explain the complexity of modern socio-economic life.Network methodology; regional development

Keystone sector methodology:network analysis comparative study

In this paper, we present some new perspectives on rural regional development strategies. Contradictory goals in macroeconomic policies, such as maximizing growth, efficiency and technological innovation with equity or efficient growth with regional disparities, tend to appear with higher costs to small open economies. A large number of studies are focused on this trade-off, using national and some regional aggregate indicators mostly based on economic flows prices and quantities). However the urbanization process is still concentrated in a few traditionally big cities, which is particularly the case in Portugal. The ‘keystone sector’ methodology we apply here shows that other important flows embedded in small town social networks can provide complementary understanding of such issues. Conclusions about a case study in Portugal, its internal and external relations and the comparison with some US similar studies described in the literature, will highlight and enhance the understanding of this approach to the articulation of development strategies in sparsely populated regions in the E.U.

Resource-constrained project scheduling.

Abstract: Resource-constrained project scheduling involves the scheduling of project activities subject to precedence and resource constraints in order to meet the objective(s) in the best possible way. The area covers a wide variety of problem types. The objective of this paper is to provide a survey of what we believe are important recent in the area . Our main focus will be on the recent progress made in and the encouraging computational experience gained with the use of optimal solution procedures for the basic resource-constrained project scheduling problem (RCPSP) and important extensions. The RCPSP involves the scheduling of a project its duration subject to zero-lag finish-start precedence constraints of the PERT/CPM type and constant availability constraints on the required set of renewable resources. We discuss recent striking advances in dealing with this problem using a new depth-first branch-and-bound procedure, elaborating on the effective and efficient branching scheme, bounding calculations and dominance rules, and discuss the potential of using truncated branch-and-bound. We derive a set of conclusions from the research on optimal solution procedures for the basis RCPSP and subsequently illustrate how effective and efficient branching rules and several of the strong dominance and bounding arguments can be extended to a rich and realistic variety of related problems. The preemptive resource-constrained project scheduling problem (PRCPSP) relaxes the nonpreemption condition of the RCPSP, thus allowing activities to be interrupted at integer points in time and resumed later without additional penalty cost. The generalized resource-constrained project scheduling (GRCPSP) extends the RCPSP to the case of precedence diagramming type of precedence constraints (minimal finish-start, start-start, start-finish, finish-finish precedence relations), activity ready times, deadlines and variable resource availability's. The resource-constrained project scheduling problem with generalized precedence relations (RCPSP-GPR) allows for start-start, finish-start and finish-finish constraints with minimal and maximal time lags. The MAX-NPV problem aims at scheduling project activities in order to maximize the net present value of the project in the absence of resource constraints. The resource-constrained project scheduling problem with discounted cash flows (RCPSP-DC) aims at the same non-regular objective in the presence of resource constraints. The resource availability cost problem (RACP) aims at determining the cheapest resource availability amounts for which a feasible solution exists that does not violate the project deadline. In the discrete time/cost trade-off problem (DTCTP) the duration of an activity is a discrete, non-increasing function of the amount of a single nonrenewable resource committed to it. In the discrete time/resource trade-off problem (DTRTP) the duration of an activity is a discrete, non-increasing function of the amount of a single renewable resource. Each activity must then be scheduled in one of its possible execution modes. In addition to time/resource trade-offs, the multi-mode project scheduling problem (MRCPSP) allows for resource/resource trade-offs and constraints on renewable, nonrenewable and doubly-constrained resources. We report on recent computational results and end with overall conclusions and suggestions for future research.Scheduling; Optimal;

Pricing toll roads under uncertainty

We study the toll pricing problem when the non-toll costs on the network are not fixed and can vary over time. We assume that users who take their decisions, after the tolls are fixed, have full information of all costs before making their decision. Toll-setter, on the other hand, do not have any information of the future costs on the network. The only information toll-setter have is historical information (sample) of the network costs. In this work we study this problem on parallel networks and networks with few number of paths in single origin-destination setting. We formulate toll-setting problem in this setting as a distributionally robust optimization problem and propose a method to solve to it. We illustrate the usefulness of our approach by doing numerical experiments using a parallel network

Locating and Protecting Facilities Subject to Random Disruptions and Attacks

Recent events such as the 2011 Tohoku earthquake and tsunami in Japan have revealed the vulnerability of networks such as supply chains to disruptive events. In particular, it has become apparent that the failure of a few elements of an infrastructure system can cause a system-wide disruption. Thus, it is important to learn more about which elements of infrastructure systems are most critical and how to protect an infrastructure system from the effects of a disruption. This dissertation seeks to enhance the understanding of how to design and protect networked infrastructure systems from disruptions by developing new mathematical models and solution techniques and using them to help decision-makers by discovering new decision-making insights. Several gaps exist in the body of knowledge concerning how to design and protect networks that are subject to disruptions. First, there is a lack of insights on how to make equitable decisions related to designing networks subject to disruptions. This is important in public-sector decision-making where it is important to generate solutions that are equitable across multiple stakeholders. Second, there is a lack of models that integrate system design and system protection decisions. These models are needed so that we can understand the benefit of integrating design and protection decisions. Finally, most of the literature makes several key assumptions: 1) protection of infrastructure elements is perfect, 2) an element is either fully protected or fully unprotected, and 3) after a disruption facilities are either completely operational or completely failed. While these may be reasonable assumptions in some contexts, there may exist contexts in which these assumptions are limiting. There are several difficulties with filling these gaps in the literature. This dissertation describes the discovery of mathematical formulations needed to fill these gaps as well as the identification of appropriate solution strategies