Abstract
This chapter studies a temporal network whose tasks give rise to cash flows. Positive cash flows denote cash inflows (e.g., received payments), whereas negative cash flows represent cash outflows (e.g., accrued costs). We present a method that maximizes the network’s net present value (NPV), which is defined as the discounted sum of all arising cash flows. NPV maximization problems arise in project management, process scheduling and several other application areas. For example, in capital-intensive IT and construction projects, large amounts of money are invested over long periods of time, and the wise coordination of cash in- and outflows crucially affects the profitability of such projects. In this context, the NPV can be regarded as the “cash equivalent” of undertaking a project.
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Notes
- 1.
We will use a consistent notation for all models reviewed in this section. Therefore, we may slightly modify some of the original formulations without changing their meaning.
- 2.
Generalized precedences are explained further in Sect. 3.3.
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- 4.
See http://www.wior.uni-karlsruhe.de/LS Neumann/Forschung/ProGenMax.
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© 2012 Springer-Verlag Berlin Heidelberg
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Wiesemann, W. (2012). Maximization of the Net Present Value. In: Optimization of Temporal Networks under Uncertainty. Advances in Computational Management Science, vol 11. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-23427-9_3
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DOI: https://doi.org/10.1007/978-3-642-23427-9_3
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