Optimum Finance-Based Scheduling

Abstract

Even though advanced heuristic and metaheuristic models have been developed for minimizing financing cost by using total float to adjust the start times of activities, these models overlook the fact that the attempt to minimize financing cost may result in more than one work schedule with minimum financing cost. It is therefore not surprising that no research has been conducted to select the best financing schedule out of the multiple optimal work schedules. It is well known that total float must be used sparingly to avoid the creation of too many critical and near-critical activities that may cause delays in the project duration. Indeed, the loss of schedule flexibility caused by the use of total float comes at a cost. It is argued in this paper that the cost of float consumption should be a vital part of models designed to minimize financing cost. The research presented in this paper attempts to fill this gap. A model is proposed in this study that not only minimizes financing cost but also demonstrates the negative impact of not considering the cost of float consumption in reaching the optimal solution, an area of research that is mostly overlooked in the finance-based scheduling literature. This research contributes to the body of knowledge by demonstrating that there may be more than one work schedule with minimum financing cost, and that the cost of float consumption must be considered to find the most optimal solution.