A holistic approach for portfolio selection and resource-constrained scheduling of multi-task projects

Abstract

Globalization and resulting competition necessitate companies to invest continually on technological upgrades and projects for their sustained economic growth. These projects invariably compete with each other for limited resources such as budget, time, workforce, materials, facilities, and equipment. Complex interactions among projects arising due to limited resources and the desire to reduce the time to market make it extremely difficult for the decision-makers to select the best portfolio of projects, and to schedule their activities optimally. In this paper, we propose a simple zero-one mixed integer linear programming model for simultaneous portfolio selection and task scheduling with the objective of maximizing the net present value of the portfolio. To make the model practical, we incorporate several realistic features such as renewable and non-renewable resources, outsourcing, project delay penalties, inter-project relationships etc. Finally, we assess the performance of our model using a few examples from the literature.