Reinvestment Strategy-Based Project Portfolio Selection and Scheduling with Time-Dependent Budget Limit Considering Time Value of Capital

The selection and schedule of right project portfolio is an important part of successful project management. Considering annual budget and time value of capital, a mathematical optimization model is proposed to address the problem of simultaneously selecting and scheduling a suitable project portfolio among available projects based on reinvestment strategy. For practical situations, annual budget is assumed time-dependent and time value of capital is also integrated into the model. Through reinvestment strategy, the profit generated by completed projects can be reinvested to finance other projects to maximize total profit of the portfolio. Additional constraint of interrelationship among projects, such as partial exclusiveness is also incorporated into the model to represent closely specified problems. Finally, an experiment study is presented to validate the model capability for dealing with optimal selection and schedule of project portfolio under considerations.