Project prioritization via optimization

Ali Koç*, David Morton, Elmira Popova, Ernie Kee, Drew Richards, Alice Sun, Stephen Hess

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Scopus citations

Abstract

We consider a problem commonly faced in industry, involving annual selection of plant capital investments. A typical approach to such a problem uses a multi-knapsack formulation, which takes as input the available budget in each year, the stream ofliabilities induced by selecting each project, and the profit, i.e., net present value, of each project. The goal is to select the portfolio of projects with the highest total net present value, while observing the budget constraint for each year, as well as any additional constraints. A portfolio selected in this manner can fail to hedge against uncertainties in the budget, the liability stream and the profit. So, we propose a model that forms an optimal priority list of projects, incorporating multiple scenarios for these input parameters. Our model is not a simplistic ranking scheme. Structural and stochastic dependencies among the projects are key to our approach. We apply our methods on a set of example projects from South Texas Project Nuclear Operating Company.

Original languageEnglish (US)
Title of host publication2007 Proceedings of the ASME Pressure Vessels and Piping Conference - Operations, Applications and Components
Pages107-113
Number of pages7
Volume7
DOIs
StatePublished - May 19 2008
Event2007 ASME Pressure Vessels and Piping Conference, PVP 2007 - San Antonio, TX, United States
Duration: Jul 22 2007Jul 26 2007

Other

Other2007 ASME Pressure Vessels and Piping Conference, PVP 2007
CountryUnited States
CitySan Antonio, TX
Period7/22/077/26/07

ASJC Scopus subject areas

  • Mechanical Engineering

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