Cost optimization of project schedules under constrained resources and alternative production processes by mixed-integer nonlinear programming

Purpose: The purpose of this paper is cost optimization of project schedules under constrained resources and alternative production processes (APPs). Design/methodology/approach: The model contains a cost objective function, generalized precedence relationship constraints, activity duration and start time constraints, lag/lead time constraints, execution mode (EM) constraints, project duration constraints, working time unit assignment constraints and resource constraints. The mixed-integer nonlinear programming (MINLP) superstructure of discrete solutions covers time–cost–resource options related to various EMs for project activities as well as variants for production process implementation. Findings: The proposed model provides the exact optimal output data for project management, such as network diagrams, Gantt charts, histograms and S-curves. In contrast to classic scheduling approaches, here the optimal project structure is obtained as a model-endogenous decision. The project planner is thus enabled to achieve optimization of the production process simultaneously with resource-constrained scheduling of activities in discrete time units and at a minimum total cost. Practical implications: A set of application examples are addressed on an actual construction project to display the advantages of proposed model. Originality/value: The unique value this paper contributes to the body of knowledge reflects through the proposed MINLP model, which is capable of performing the exact cost optimization of production process (where presence and number of activities including their mutual relations are dealt as feasible alternatives, meaning not as fixed parameters) simultaneously with the associated resource-constrained project scheduling, whereby that is achieved within a uniform procedure.