Maximizing the Project’s Net Present Value under Earliness Penalties

To allow for a more comprehensive analysis of the financial aspects of a project, we study a project scheduling problem with general temporal constraints, where in addition to cash flows associated with the completion of each activity, per time unit earliness penalties apply if activities are completed before their due date. The objective is to maximize the project net present value including the discounted earliness penalties. To solve this problem, we first investigate the structural properties of the extended objective function. Based on these results, we propose an adaptation of an existing steepest ascent approach for net present value project scheduling problems.