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Combinatorial auction algorithm for project portfolio selection and scheduling to maximize the net present value

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Abstract

Scheduling projects at the activity level increases the complexity of decision making of project portfolio selection but also expands the search space to include better project portfolios. An integer programming model is formulated for the project portfolio selection and scheduling problem. An iterative multi-unit combinatorial auction algorithm is proposed to select and schedule project portfolios through a distributed bidding mechanism. Two price update schemes are designed to adopt either a standard or an adaptive Walrasian tâtonnement process. Computational tests show that the proposed auction algorithm with the adaptive price update scheme selects and schedules project portfolios effectively and maximizes the total net present value. The price profile generated by the algorithm also provides managerial insights for project managers and helps to manage the scarce resources efficiently.

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Authors and Affiliations

  1. Department of Management Science & Engineering, Zhejiang University, Hangzhou, 310058, China

    Yong-yi Shou

  2. Department of Instrument Science & Engineering, Zhejiang University, Hangzhou, 310027, China

    Yi-lun Huang

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  1. Yong-yi Shou
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  2. Yi-lun Huang
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Correspondence to Yong-yi Shou.

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Shou, Yy., Huang, Yl. Combinatorial auction algorithm for project portfolio selection and scheduling to maximize the net present value. J. Zhejiang Univ. - Sci. C 11, 562–574 (2010). https://doi.org/10.1631/jzus.C0910479

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