Journal of the Mechanical Behavior of Materials 2022; 31: 267–281

Research Article

Musaab Falih Hasan* and Sawsan Rasheed Mohammed

Time and finance optimization model for multiple

construction projects using genetic algorithm
https://doi.org/10.1515/jmbm-2022-0032 are two primary goals: the first step is to see if the con-
received March 10, 2022; accepted April 12, 2022 tractor has enough money to complete the project. In the
Abstract: Construction contractors usually undertake mul- second step, the goal is to show how much of the invest-
tiple construction projects simultaneously. Such a situation ment has been used and how the payments have pro-
involves sharing different types of resources, including gressed throughout the project. Once the contractor has
monetary, equipment, and manpower, which may become achieved these two goals, he can begin managing the
a major challenge in many cases. In this study, the financial cash flow of the project, which is referred to as cash
aspects of working on multiple projects at a time are flow management [2]. The importance of financial man-
addressed and investigated. The study considers dealing agement in construction management has long been
with financial shortages by proposing a multi-project sche- recognized. On the other hand, the construction industry
duling optimization model for profit maximization, while has the highest rate of insolvency compared to other sec-
minimizing the total project duration. Optimization genetic tors of the economy. Due to poor financial management,
algorithm and finance-based scheduling are used to pro- many construction businesses fail, particularly due to
duce feasible schedules that balance the finance of activities lack of focus on cash flow forecasting. Lack of cash
at any time with the available funds. The model has been flow control has been a major contributor to the indus-
tested in multi scenarios, and the results are analyzed. The try’s high rate of insolvencies for years; as a result, it is a
results show that negative cash flow is minimized from topic that all contractors should consider seriously. Con-
−693,784 to −634,514 in enterprise I and from −2,646,408 tractors go out of business because they run out of cash,
to −2,529,324 in enterprise II in the first scenario and also not because they do not have enough work. Cash flow is
results show that negative cash flow is minimized to −612,768 one of the most important tools for regulating an enter-
with a profit of +200,116 in enterprise I and to −2,597,290 with prise’s cash flow by determining the cash in and cash out
a profit of +1,537,632 in enterprise II in the second scenario. in a project and presenting the possible outcomes with a
time effect [3]. Contractors used to face financial shocks
Keywords: optimization, multiple construction projects, when undertaking multiple construction projects concur-
cash flow, genetic algorithm rently. Despite any reasons behind that, they need to man-
euver with their available resources, especially funds, to
minimize time or cost overrun. Such optimum solutions
are challenging and complicated without a comprehensive
1 Introduction view of the whole situation in all the undertaken projects.
A computerized system might be of great help in this
The most critical resource for any project is cash, as com- sense.
panies fail more often due to lack of cash than due to lack
of other resources. Over 60% of contractor failures are
attributed to economic factors, according to [1]. In addi-
tion to conducting a financial feasibility analysis, there 2 Research methodology
 This study’s methodology is based on the premise that
* Corresponding author: Musaab Falih Hasan, Department of Civil project financing costs and profits are affected by nega-
Engineering, University of Baghdad, Baghdad, Iraq,
tive cash flow. Because of this, schedulers can use an
e-mail: [email protected]
Sawsan Rasheed Mohammed: Department of Civil Engineering,
optimization algorithm by a quantitative system design
University of Baghdad, Baghdad, Iraq, to devise schedules that maximize project profit, while
e-mail: [email protected] minimizing negative cash flow to avoid a budget deficit

Open Access. © 2022 Musaab Falih Hasan and Sawsan Rasheed Mohammed, published by De Gruyter. This work is licensed under the
Creative Commons Attribution 4.0 International License.
268  Musaab Falih Hasan and Sawsan Rasheed Mohammed

without delaying project completion, allowing contrac- line [7]. A model that minimizes financing costs by taking
tors to relieve financial pressure on activity execution. into account various financing options and a work schedule
Hence, the maximum profit can be attained. This neces- with typical activity durations is presented. There are several
sitates an appropriate cash flow management strategy; advantages in using a new financing model, such as a lower
the following steps are performed in this research: financing cost, avoiding a longer project duration, avoiding
• Literature review: Investigating the state-of-art for mod- liquidated damages, and reducing the risk of a work sche-
eling cash flow combination of multi construction projects. dule that includes more critical activities, over previous
• Data collection and analysis: Gathering factual data on models [8]. An innovative multi-objective scheduling opti-
multi construction projects’ cash flow in some local mization model for multiple construction projects is devel-
major contracting enterprises. oped in this study. Time, cost, profit, and resource fluctua-
• Building the optimization model: The model should tions are among the goals of this project. Multi-objective
provide for cash flow planning that assures profit max- scheduling optimization model for multiple construction
imization, while maintaining the total project duration projects was developed using the fast elitist non-dominated
using the optimization algorithm. sorting genetic algorithm (NSGA-II) [9].

3 Literature review 4 Scheduling using critical path

Time-cost trade-off analysis and financing optimization
method
are proposed as part of an integrated model. The optimi-
In order to meet financial goals, a project’s activities are
zation problem is solved using a hybrid GALP algorithm,
shifted without affecting the project’s deadline [6]. First,
which combines genetic algorithms (GA) with linear pro-
the Critical Path Method (CPM) was used to determine the
gramming (LP). Using small and large networks, the pro-
time of the project’s activities in order to schedule them.
posed model is evaluated to see if it achieves optimal
As an extension of the CPM approach, this study explores
results in terms of financing costs and profits, to validate
the effects of varying the start and end times of activities,
the model’s performance and structure, and to confirm its
as well as the total float and free float that can exist
practicality in large networks [4]. A practical method for
between them. Only the names of the activities, their
solving the multi-objective optimization problem in con-
predecessors, and the start date of the first activity in
struction project management to reduce the error prob-
any project need to be entered into the model proposed
ability that the optimized project will have in the actual
in this article. Each activity’s CPM will be calculated by
project was proposed in [5]. Payments to subcontractors
the model. Each project’s first activity must be set to
and suppliers, as well as financial arrangements with
begin on a specific date, even though the projects are
banks, are highlighted as the main payment conditions
being carried out at the same time. Changing the start
based on portfolio cash flow management. An optimiza-
dates of activities will only be possible within the free
tion model that uses a GA is presented to assist construc-
float of each activity, as each project has a set deadline.
tion enterprises in determining the optimum project
Consequently, each activity will have start and finish
schedules that minimize the total interest paid by a con-
dates, along with deferred start and deferred finish dates,
tractor for a portfolio of projects as well as minimize the
determined by the optimization model to meet the finan-
maximum negative cash flow while accounting for var-
cial objectives of the contractor.
ious payment conditions between multiple parties [6]. A
model that minimizes financing cost by integrating a line- Activity delayed start = Activity start date + X , (1)
of-credit and a long-term loan using a work schedule with
where X = shifted days within free float determined by the
normal activity durations is presented. The proposed model
optimization algorithm.
provides the optimum schedules of financing inflow (bor-
rowed money) and outflow (repayments of principal and
interest). The contractor benefits when the proposed model
is used because the contractor: (1) pays less financing cost, 5 Cash flow in construction project
(2) obtains higher profit, and (3) has more negotiating power
with a lender because the contractor provides an optimal Cash flow has been extensively researched from the con-
financing schedule when applying for a loan and/or credit tractor’s perspective. The financial terminology and
 Time and finance optimization model for multiple construction projects  269

n
equations used in [10] will be adapted for this study with
G= ∑ (Pt + Et ), (5)
some minor changes. In Figure 1, you can see a typical t=0
construction project’s cash flow. Financial institutions
where G is the profit represented by a positive number,
such as banks, suppliers, and subcontractors all have
while the cost Et is represented by a negative number.
an effect on a contractor’s cash flow. It is important to
Because of the fact that Nt is negative in the early stages
keep in mind that how much money a contractor gets
of the project and becomes positive towards the end of
from the owner depends on the payment terms he has
the project, contractors typically use bank loans to finance
with that person. Bank financing costs, such as interest
their projects and incur financing costs that are affected by
rates on loans, will have an impact on the contractor’s
a specific annual interest rate (i). As a result, the net cumu-
cash outflow as a result of these terms. The financing
lative cash flow before and after the payment (Pt) can be
costs that contractors incur while working on a project
explained by Eqs. (6)–(8) [11]:
are sometimes referred to as interest payments, and they
reduce their profits [11]. Terms like contractor-owner It = iNt − 1, (6)
terms, such as advance payment, retention, and when t
to repay the retention percentage, have an impact on Fˆt = Ft + ∑ Ik (1 + i)t −k , (7)
cash outflow as well. When a contractor has multiple k=1

projects going on at the same time, they are more likely Nˆt = Fˆt + Pt . (8)
to be able to negotiate better terms for subcontractors by
offering them the opportunity to work on more projects. Net cash flow (N̂t ) during a project is the maximum
Contractual expenses (Et), excluding interest or financing value that the contractor will need to cover its financing
costs, include weekly payments to subcontractors, portions at any given project. Enterprise-level equations will be
of activities executed by the contractor’s own resources, and used in this article instead of project-level formulae.
project-related indirect costs. Many researchers’ financial scheduling goals have
been to maximize profits (G) or reduce total interest pay-
Et = Construction expenses during time period (t ) ments (I). In this article, a GA is used to reduce the port-
(2)
excluding financing costs. folio’s maximum cumulative negative net cash flow and
maximize the portfolio’s overall profit (G) using finance-
Cumulative cash flow before receiving the interim
based scheduling of multiple projects.
payment for t ≥ 1 is [11]:
Ft = Nt − 1 + Et , (3)

where (Nt–1) the cumulative net cash flow from previous time
periods up to time period (t – 1). The cumulative net cash 6 GA
flow after receiving the interim payment is given by ref. [11]:
This study’s optimization engine uses GAs with heuris-
Nt = Ft + Pt , (4)
tics. John Holland invented GAs in 1975. GA, a metaheur-
where Pt is the interim payment received at the end of istic, simulates Darwin’s theory of evolution and survival
time (t). The following equation gives the profit for the of the fittest. Changing organisms are thought to be
project [11]: the result of genetic mutation, reproduction, and gene

Figure 1: Typical cash flow profile for a construction project [11].

270  Musaab Falih Hasan and Sawsan Rasheed Mohammed

Figure 2: Chart for model development.

crossover [12]. The metaheuristic solves combinatorial creates many generations. The rest is discarded. Reproduc-
optimization problems by random search. Using GA, the tion, crossover, and mutation from that generation are used
first generation’s improvement becomes the basis for to improve it. It is then applied to the next generation.
the next generation’s random search. The first step in The cycle repeats once the termination condition is met. A
solving any combinatorial optimization problem using generation’s best chromosomes are passed down through
GAs is to create chromosomes. The parameters encoded reproduction. Their role as parents to the next generation
are generated at random, and each gene offers a potential adds to the solution’s bitterness. The least fit chromosomes
solution to the problem. Gene structure is a string of ele- are discarded to keep the population stable. Crossover is
ments that corresponds to the start of each activity. Genes the process of mixing two chromosomes to see what hap-
represent a possible timetable. Genes are evaluated based pens. It is the main operation in GAs. Like in marriage, two-
on expected contractor profit and negative cash flow at parent chromosomes are chosen at random to discuss the
the end of the project. This study’s goal is to find a project issue. The best chromosomes are more likely to be chosen at
schedule that minimizes negative cash and maximizes pro- random. The phenomenon of “mutation” occurs when one
ject profit. Good chromosome individuals produce high or two offspring in a generation suddenly become geniuses.
values in maximization problems and low values in mini- Mutations are used in evolution to ensure the best possible
mization problems [13]. The first chromosome generation outcome for the next generation. No matter how many
 Time and finance optimization model for multiple construction projects  271

Table 1: Projects of public and private enterprises

Projects Enterprises Work sector Year

Bagaq Bridge in Nineveh Governorate AL-Mutasim State Constructional Contracting Company Public 2020–2021
Zghitun Bridge in Kirkuk Governorate AL-Mutasim State Constructional Contracting Company Public 2020–2021
Baladruz Road in Diyala Governorate Ashur State Constructional Contracting Company Public 2019–2020
Khanaqin-Naft Khana Road in Diyala Governorate Ashur State Constructional Contracting Company Public 2019–2020
Al-Fajr Al-Bdeir Road in Thi Qar Governorate Ashur State Constructional Contracting Company Public 2019–2020

recombination and crossovers occur, this data will always • The project’s schedule is used to determine the max-
be lacking. To compensate, some chromosomes are silenced imum negative cash flow and profit.
[14]. The procedure compares each generation’s chromo- • Optimization process using GA begins to search for the
some values to that of the previous generation, keeping best possible scenario for a given project.
only those that improve. The procedure must be repeated
until an endpoint is reached. In this step, the available floats are used to generate
multiple scenarios with activities starting at various times,
and the resulting cash flow is calculated. GA processes,
7 Model development such as reproduction, crossover, and mutation, are used
to create project scenarios. The best starting times are
Project financing costs and profit are impacted by nega- then determined by comparing each scenario to a prede-
tive cash flow, as discussed previously. When cash flow is termined objective function. In order to achieve this goal,
properly managed, schedulers can devise plans that max- a comprehensive model of various cash problems was
imize project profitability. By reducing negative cash flow constructed. For this, we will use two scenarios. The
as much as possible, this quantitative system design seeks first scenario is used to find a solution to the problem of
to avoid a budget shortage without delaying project com- devising schedules that correspond to a minimum nega-
pletion. Because of this, you can make the most money tive cash flow without reducing profit. The second sce-
possible and a cash flow management strategy is required. nario extends the time of the project and reduces the
This model’s development is illustrated in Figure 2. problem of negative cash flow while maintaining the
The main goal of the problem can be stated as max- maximum profit.
imizing the project profit by: • The output data from the model are the selected sce-
• The project is initially scheduled based on input data, nario’s optimized schedule, optimized cash flow, and
such as the relationships and duration of activities. net cash flow diagram. In the following section, a

Table 2: Items of work and other essential data of project I in enterprise I

Activity Duration (day) Predecessor Cost of activity × 1,000 IQD Lag EST EFT LST LFT TF

A1000 60 — 47,400 0 90 149 90 149 0

A1010 46 — 83,149 0 90 135 139 184 49
A1020 40 A1000 and A1010 324,590 35 185 224 185 224 0
A1030 37 A1020 117,514 7 232 268 232 268 0
A1040 31 A1030 75,375 9 278 308 278 308 0
A1050 16 A1040 142,299 10 319 334 319 334 0
A1060 60 A1050 526,015 0 335 394 335 394 0
A1070 26 A1060 167,892 0 395 420 395 420 0
A1080 24 A1020 276,500 0 225 248 405 428 180
A1090 7 A1080 21,978 0 249 255 429 435 180
A1100 30 A1070 and A1090 533,345 15 436 465 436 465 0
A1120 21 A1100 71,890 0 466 486 466 486 0
A1130 10 A1100 6,162 0 466 475 477 486 11
A1110 10 A1101 52,014 0 466 475 477 486 11
A1140 6 A1120, A1130, and A1110 8,651 0 487 492 487 492 0
272  Musaab Falih Hasan and Sawsan Rasheed Mohammed

Table 3: Items of work and other essential data of project II in enterprise I

Activity Duration (day) Predecessor Cost of activity × 1,000 IQD Lag EST EFT LST LFT TF

A1000 15 — 15,800 0 1 15 1 15 0
A1020 60 A1000 300,299 0 16 75 16 75 0
A1084 35 A1000 24,111 259 275 309 336 370 61
A1085 30 A1084 30,382 0 310 339 371 400 61
A1030 30 A1020 171,825 15 91 120 91 120 0
A1040 60 A1030 82,753 15 136 195 136 195 0
A1050 30 A1040 43,450 15 211 240 211 240 0
A1060 30 A1050 166,848 15 256 285 256 285 0
A1070 60 A1060 83,938 0 286 345 286 345 0
A1080 30 A1070 and A1085 54,053 15 361 390 361 390 0
A1090 20 A1080 and A1085 30,462 10 401 420 401 420 0
A1100 15 A1090 22,003 0 421 435 421 435 0
A1120 20 A1080 38,394 0 391 410 446 465 55
A1130 15 A1080 30,119 0 391 405 451 465 60
A1140 10 A1080 10,270 0 391 400 456 465 65
A1110 30 A1100 22,041 0 436 465 436 465 0
A1150 5 A1110, A1120, A1130, and A1140 8,279 0 466 470 466 470 0

Table 4: Items of work and other essential data of project I in enterprise II

Activity Duration (day) Predecessor Cost of activity × 1,000 IQD Lag EST EFT LST LFT TF

A1000 60 — 171,000 0 1 60 1 60 0
A1005 80 A1000 1,125,000 0 61 140 61 140 0
A1010 60 A1000 300,000 0 61 120 101 160 40
A1015 60 A1000 12,000 0 61 120 81 140 20
A1020 80 A1010 777,150 0 121 200 161 240 40
A1025 90 A1005 and A1015 12,000 0 141 230 141 230 0
A1030 60 A1005 240,000 0 141 200 261 320 120
A1040 60 A1015 48,750 0 121 180 151 210 30
A1045 30 A1040 150,000 0 181 210 211 240 30
A1050 70 A1025, A1020, and A1045 2,250,000 10 241 310 241 310 0
A1060 60 A1050 1,764,000 10 321 380 321 380 0
A1090 50 A1030 120,000 5 206 255 336 385 130
A1095 60 A1030 450,000 5 206 265 326 385 120
A1100 35 A1060, A1090, and A1095 48,000 5 386 420 386 420 0
A1110 30 A1060, A1090, and A1095 240,000 5 386 415 391 420 5
A1120 25 A1100 and A1110 240,000 0 421 445 421 445 0

practical construction project is used to demonstrate The data needed to develop models are obtained
the model’s applicability. from 5 projects completed in the period (2019–2021).
Information is extracted from the records of the enter-
prises in the Ministry of Construction and Housing and
8 Case study Municipalities. The project is assigned to one main contractor
and includes the following works: removing damaged items,
The proposed model can be demonstrated using a sample installing new items, and maintaining some damaged items.
of multiple construction projects from two public sector Tables 2–6 show each item’s work, duration, and direct cost,
enterprises. Scenario analysis is based on a variety of representing ten columns of input data. The first column,
constraints, such as project profitability and completion “Activity name,” is used to identify the activities of the pro-
dates. Table 1 shows the maintenance and restoration ject; Second column, “Duration,” is the activity duration in
projects for the roads and bridges involved. working days; Third column, “Predecessor,” is used to define
 Time and finance optimization model for multiple construction projects  273

Table 5: Items of work and other essential data of project II in enterprise II

Activity Duration (day) Predecessor Cost of activity × 1,000 IQD Lag EST EFT LST LFT TF

A900 50 — 123,750 0 123 172 123 172 0

A1000 60 A900 585,975 0 173 232 173 232 0
A1010 30 A900 184,500 0 173 202 203 232 30
A1020 80 A1000 and A1010 306,000 0 233 312 248 327 15
A1030 90 A1000 and A1010 181,500 0 233 322 233 322 0
A1040 30 A1000 and A1010 9,000 0 233 262 298 327 65
A1050 80 A1030, A1040, and A1020 1,532,550 5 328 407 328 407 0
A1060 70 A1050 1,217,025 5 413 482 413 482 0
A1070 40 A1060 1,275,375 5 488 527 488 527 0
A1079 90 A1000 and A1010 105,000 0 233 322 443 532 210
A1080 30 A1070 and A1079 184,500 5 533 562 533 562 0
A1100 30 A1080 49,725 0 563 592 563 592 0
A1110 30 A1080 248,625 0 563 592 563 592 0
A1120 19 A1100 and A1110 18,750 0 593 612 593 612 0

Table 6: Items of work and other essential data of project III in enterprise II

Activity Duration (day) Predecessor Cost of activity × 1,000 IQD Lag EST EFT LST LFT TF

A1000 60 — 19,614 0 184 243 184 243 0

A1005 70 A1000 28,133 0 244 313 244 313 0
A1010 30 A1000 16,164 0 244 273 284 313 40
A1020 60 A1005 and A1010 105,000 0 314 373 314 373 0
A1050 40 A1020 37,594 5 379 418 379 418 0
A1070 30 A1050 and A1080 486,000 5 424 453 424 453 0
A1080 30 A1020 222,833 5 379 408 394 423 15

Figure 3: Planned activity network for enterprise I.

274  Musaab Falih Hasan and Sawsan Rasheed Mohammed

Figure 4: Planned activity network for enterprise II.

Figure 5: Time schedule for enterprise I.

 Time and finance optimization model for multiple construction projects  275

Figure 6: Time schedule for enterprise II.

Table 7: Cash flow calculation according to time schedule in enterprise I

Month Bill to owner Retention Taxes Total receipts Materials Labor Overhead Total cost Cumulative Net cash
cash flow Ft flow Nt

1 57,042 38,837 7,282 103,162 –103,162 –103,162

2 121,367 12,137 4,005 105,225 92,307 62,847 11,784 166,938 –270,100 –164,875
3 196,398 19,640 6,481 170,277 45,524 30,995 5,812 82,331 –247,206 –76,929
4 96,860 9,686 3,196 83,978 143,317 97,578 18,296 259,191 –336,120 –252,142
5 304,931 30,493 10,063 264,375 44,531 30,319 5,685 80,534 –332,677 –68,302
6 94,746 9,475 3,127 82,145 25,437 17,319 3,247 46,003 –114,305 –32,160
7 54,121 5,412 1,786 46,923 143,684 97,827 18,343 259,854 –292,014 –245,091
8 305,711 30,571 10,088 265,051 228,463 155,549 29,165 413,177 –658,268 –393,217
9 486,091 48,609 16,041 421,441 166,196 113,155 21,217 300,567 –693,784 –272,343
10 353,608 35,361 11,669 306,579 103,563 70,511 13,221 187,295 –459,638 –153,059
11 220,347 25,820 7,271 187,255 139,176 94,758 17,767 251,702 –404,761 –217,506
12 296,120 9,772 286,348 177,781 121,043 22,695 321,519 –539,025 –252,678
13 378,258 12,483 365,775 198,209 134,951 25,303 358,463 –611,141 –245,365
14 421,722 13,917 407,805 145,619 99,145 18,590 263,353 –508,718 –100,913
15 309,827 10,224 299,602 281,020 191,333 35,875 508,227 –609,141 –309,538
16 597,914 19,731 578,183 143,835 97,930 18,362 260,126 –569,665 8,519
17 306,031 10,099 295,932 — — — — 8,519 304,451
Total 4,544,051 227,203 149,954 4,166,894 2,135,704 1,454,096 272,643 3,862,443
276  Musaab Falih Hasan and Sawsan Rasheed Mohammed

Table 8: Cash flow calculation according to time schedule in enterprise II

Month Bill to owner Retention Taxes Total receipts Materials Labor Overhead Total cost Cumulative Net cash
cash flow Ft flow Nt

1 53,010 35,340 9,424 97,774 –97,774 –97,774

2 117,800 11,780 3,887 102,133 61,148 40,765 10,871 112,783 –210,557 –108,425
3 135,883 13,588 4,484 117,811 358,283 238,855 63,695 660,832 –769,257 –651,446
4 796,183 79,618 26,274 690,291 367,871 245,247 65,399 678,517 –1,329,963 –639,672
5 817,491 81,749 26,977 708,765 411,196 274,131 73,102 758,429 –1,398,101 –689,336
6 913,769 91,377 30,154 792,238 425,542 283,695 75,652 784,888 –1,474,225 –681,987
7 945,649 94,565 31,206 819,877 513,811 342,541 91,344 947,696 –1,629,682 –809,805
8 1,141,802 114,180 37,679 989,942 451,146 300,764 80,204 832,114 –1,641,919 –651,976
9 1,002,547 100,255 33,084 869,208 852,199 568,133 151,502 1,571,834 –2,223,810 –1,354,602
10 1,893,776 189,378 62,495 1,641,904 688,224 458,816 122,351 1,269,390 –2,623,993 –982,089
11 1,529,386 152,939 50,470 1,325,978 556,730 371,153 98,974 1,026,857 –2,008,946 –682,969
12 1,237,177 62,937 40,827 1,133,412 905,524 603,683 160,982 1,670,188 –2,353,157 –1,219,744
13 2,012,275 66,405 1,945,870 773,493 515,662 137,510 1,426,664 –2,646,409 –700,539
14 1,718,873 56,723 1,662,150 516,807 344,538 91,877 953,221 –1,653,760 8,390
15 1,148,460 37,899 1,110,560 679,781 453,187 120,850 1,253,818 –1,245,428 –134,868
16 1,510,624 49,851 1,460,774 288,621 192,414 51,310 532,345 –667,213 793,561
17 641,379 21,166 620,214 573,919 382,613 102,030 1,058,561 –265,000 355,213
18 1,275,375 42,087 1,233,288 219,465 146,310 39,016 404,791 –49,578 1,183,710
19 487,700 16,094 471,606 151,686 101,124 26,966 279,776 903,934 1,375,539
20 337,080 11,124 325,956 82,854 55,236 14,730 152,820 1,222,720 1,548,676
21 184,120 6,076 178,044 1,548,676 1,726,720
Total 19,847,349 992,366 654,963 18,200,020 8,931,307 5,954,205 1,587,788 16,473,300

the precedence relationships between activities; The Fourth Figures 3–6 illustrate the planned activities and time
column “Activity cost (materials and labor),” is the cost of schedule of the projects. The application of the optimiza-
each activity multiplied by 1,000 Iraq dinar; The Fifth column tion method was put to use in three stages: setting a
is the “Lag time,” between activities; Sixth to Tenth columns time schedule, calculating the cash flow for multiple con-
are refers to dates not events: “Early start time, Early finish struction projects, and finally optimizing the cash flow
time, Late start time, Late finish time, and Total float.” under various constraints. In order to achieve this goal,

Table 9: Cash flow calculation in the scenario I in enterprise I

Month Bill to owner Retention Taxes Total receipts Materials Labor Overhead Total cost Cumulative Net cash
cash flow Ft flow Nt

1 57,042 38,837 7,282 103,162 –103,162 –103,162

2 121,367 12,137 4,005 105,225 92,307 62,847 11,784 166,938 –270,100 –164,875
3 196,398 19,640 6,481 170,277 46,934 31,955 5,992 84,881 –249,756 –79,479
4 99,860 9,986 3,295 86,579 109,980 74,880 14,040 198,900 –278,379 –191,800
5 234,000 23,400 7,722 202,878 59,252 40,342 7,564 107,158 –298,958 –96,080
6 126,068 12,607 4,160 109,301 42,644 29,034 5,444 77,121 –173,202 –63,901
7 90,731 9,073 2,994 78,664 162,995 110,975 20,808 294,778 –358,679 –280,015
8 346,798 34,680 11,444 300,674 115,083 78,354 14,691 208,128 –488,144 –187,470
9 244,857 24,486 8,080 212,291 247,189 168,299 31,556 447,045 –634,514 –422,223
10 525,935 52,594 17,356 455,986 107,212 72,996 13,687 193,894 –616,118 –160,132
11 228,111 22,811 7,528 197,772 132,938 90,511 16,971 240,419 –400,551 –202,779
12 282,846 5,790 9,334 267,722 183,411 124,876 23,414 331,701 –534,480 –266,757
13 390,236 12,878 377,358 190,559 129,742 24,327 344,628 –611,386 –234,028
14 405,445 13,380 392,065 134,352 91,474 17,151 242,978 –477,005 –84,940
15 285,856 9,433 276,423 277,099 188,663 35,374 501,137 –586,077 –309,654
16 589,573 19,456 570,117 176,706 120,310 22,558 319,575 –629,229 –59,111
17 375,970 12,407 363,562 –59,111 304,451
Total 4,544,051 227,203 149,954 4,166,894 2,135,704 1,454,096 272,643 3,862,443
 Time and finance optimization model for multiple construction projects  277

Table 10: Cash flow calculation in the scenario I in enterprise II

Month Bill to owner Retention Taxes Total receipts Materials Labor Overhead Total cost Cumulative Net cash
cash flow Ft flow Nt

1 53,010 35,340 9,424 97,774 –97,774 –97,774

2 117,800 11,780 3,887 102,133 58,028 38,685 10,316 107,029 –204,803 –102,670
3 128,950 12,895 4,255 111,800 336,443 224,295 59,812 620,550 –723,219 –611,420
4 747,650 74,765 24,672 648,213 358,282 238,855 63,695 660,832 –1,272,252 –624,039
5 796,183 79,618 26,274 690,291 307,635 205,090 54,691 567,416 –1,191,455 –501,165
6 683,634 68,363 22,560 592,711 363,417 242,278 64,608 670,303 –1,171,468 –578,757
7 807,594 80,759 26,651 700,184 663,143 442,095 117,892 1,223,130 –1,801,887 –1,101,703
8 1,473,651 147,365 48,630 1,277,655 401,075 267,383 71,302 739,761 –1,841,464 –563,809
9 891,278 89,128 29,412 772,738 797,103 531,402 141,707 1,470,211 –2,034,020 –1,261,282
10 1,771,339 177,134 58,454 1,535,751 687,492 458,328 122,221 1,268,042 –2,529,324 –993,573
11 1,527,761 152,776 50,416 1,324,569 622,146 414,764 110,604 1,147,514 –2,141,087 –816,518
12 1,382,547 97,782 45,624 1,239,141 921,364 614,243 163,798 1,699,404 –2,515,922 –1,276,781
13 2,047,475 67,567 1,979,908 678,672 452,448 120,653 1,251,774 –2,528,555 –548,647
14 1,508,161 49,769 1,458,392 622,220 414,813 110,617 1,147,650 –1,696,297 –237,905
15 1,382,711 45,629 1,337,082 711,201 474,134 126,436 1,311,771 –1,549,676 –212,594
16 1,580,447 52,155 1,528,292 301,622 201,081 53,622 556,324 –768,919 759,374
17 670,270 22,119 648,151 575,319 383,546 102,279 1,061,143 –301,770 346,381
18 1,278,486 42,190 1,236,296 234,906 156,604 41,761 433,271 –86,889 1,149,407
19 522,013 17,226 504,787 149,409 99,606 26,562 275,577 873,830 1,378,617
20 332,020 10,957 321,063 88,821 59,214 15,790 163,825 1,214,792 1,535,855
21 197,379 6,514 190,866 1,535,855 1,726,721
Total 19,847,349 992,366 654,963 18,200,021 8,931,307 5,954,205 1,587,788 16,473,300

Table 11: Cash flow calculation in the scenario II in enterprise I

Month Bill to owner Retention Taxes Total Materials Labor Overhead Total cost Cumulative Net cash
receipts cash flow Ft flow Nt

1 27,266 18,564 3,481 49,311 –49,311 –49,311

2 58,013 5,801 1,914 50,297 92,307 62,847 11,784 166,938 –216,249 –165,952
3 196,398 19,640 6,481 170,277 69,896 47,589 8,923 126,408 –292,360 –122,083
4 148,715 14,872 4,908 128,936 34,108 23,223 4,354 61,685 –183,768 –54,832
5 72,571 7,257 2,395 62,919 143,300 97,566 18,294 259,159 –313,991 –251,072
6 304,893 30,489 10,061 264,342 14,204 9,671 1,813 25,689 –276,761 –12,419
7 30,222 3,022 997 26,202 160,615 109,355 20,504 290,473 –302,892 –276,689
8 341,733 34,173 11,277 296,283 74,269 50,566 9,481 134,316 –411,005 –114,723
9 158,019 15,802 5,215 137,002 74,948 51,028 9,568 135,544 –250,266 –113,264
10 159,463 15,946 5,262 138,254 199,426 135,779 25,459 360,664 –473,927 –335,673
11 424,310 42,431 14,002 367,877 136,624 93,020 17,441 247,086 –582,759 –214,882
12 290,689 29,069 9,593 252,027 111,677 76,036 14,257 201,969 –416,851 –164,824
13 237,611 8,700 7,841 221,070 184,059 125,316 23,497 332,872 –497,696 –276,626
14 391,614 12,923 378,691 185,867 126,548 23,728 336,142 –612,768 –234,077
15 395,461 13,050 382,411 114,106 77,689 14,567 206,362 –440,439 –58,028
16 242,779 8,012 234,767 74,273 50,569 9,482 134,324 –192,352 42,415
17 158,028 5,215 152,813 329,776 224,528 42,099 596,403 –553,988 –401,175
18 701,651 23,154 678,497 102,747 69,956 13,117 185,819 –586,995 91,502
218,611 7,214 224,229
211,397 6,237 4,246 796 11,280 80,222 200,116
304,451
Total 4,544,041 227,203 149,953 4,166,894
3,807,172 2,135,699 1,454,093 272,642 3,862,435
278  Musaab Falih Hasan and Sawsan Rasheed Mohammed

Table 12: Cash flow calculation in the scenario II in enterprise II

Month Bill to owner Retention Taxes Total receipts Materials Labor Overhead Total cost Cumulative Net cash
cash flow Ft flow Nt

1 53,010 35,340 9,424 97,774 –97,774 –97,774

2 117,800 11,780 3,887 102,133 58,148 38,765 10,337 107,250 –205,024 ––102,892
3 129,217 12,922 4,264 112,031 319,283 212,855 56,761 588,899 –691,791 –579,759
4 709,517 70,952 23,414 615,151 359,385 239,590 63,891 662,865 –1,242,625 –627,474
5 798,633 79,863 26,355 692,415 331,967 221,312 59,016 612,295 –1,239,769 –547,354
6 737,705 73,771 24,344 639,590 405,477 270,318 72,085 747,880 –1,295,234 –655,644
7 901,060 90,106 29,735 781,219 567,945 378,630 100,968 1,047,544 –1,703,187 –921,968
8 1,262,101 126,210 41,649 1,094,242 473,681 315,788 84,210 873,679 –1,795,647 –701,406
9 1,052,625 105,263 34,737 912,626 813,362 542,242 144,598 1,500,202 –2,201,607 –1,288,981
10 1,807,472 180,747 59,647 1,567,078 709,324 472,883 126,102 1,308,308 –2,597,290 –1,030,211
11 1,576,275 157,628 52,017 1,366,630 572,032 381,355 101,695 1,055,081 –2,085,293 –718,662
12 1,271,182 83,125 41,949 1,146,108 905,524 603,683 160,982 1,670,188 –2,388,850 –1,242,742
13 2,012,275 66,405 1,945,870 707,503 471,668 125,778 1,304,949 –2,547,692 –601,822
14 1,572,228 51,884 1,520,344 446,864 297,909 79,442 824,215 –1,426,037 94,308
15 993,030 32,770 960,260 566,968 377,978 100,794 1,045,740 –951,432 8,828
16 1,259,928 41,578 1,218,350 593,782 395,855 105,561 1,095,197 –1,086,370 131,981
17 1,319,515 43,544 1,275,971 573,919 382,613 102,030 1,058,561 –926,581 349,390
18 1,275,375 42,087 1,233,288 234,905 156,603 41,761 433,269 –83,879 1,149,409
19 522,011 17,226 504,785 149,409 99,606 26,562 275,577 873,832 1,378,617
20 332,020 10,957 321,063 77,571 51,714 13,790 143,075 1,235,542 1,556,605
21 172,380 5,689 166,691 11,250 7,500 2,000 20,750 1,535,855 1,702,546
22 25,000 825 24,175 1,702,546 1,537,632
Total 19,847,349 992,366 654,963 18,200,021 8,931,307 5,954,205 1,587,788 16,473,300

a complete model of multiple cash issues is used. For • Total cost: The total costs incurred by the contractor in
this, the previously mentioned two scenarios are used. each month (materials, labor, and overhead).
• Cumulative cash flow (Ft): The cumulative cash flow for
each month (–103, 162–166, 938 = –270,100) (net cash
flow in month 1+ total cost in month 2).
9 Calculation of cash flows • Net cash flow (Nt): The net cash flow for each month
(–270, 100 + 105, 255 = −164,875) (cumulative cash flow
Table 7 shows the total cash-in and cash-out values for in month 2+ total receipts in month 2).
the first enterprise and the other financial parameters’
values and the total duration of projects. The maximum
negative cash flow is −693,784 at the end of the 9th 10 Optimization model
month, and the profit of the projects is +304,451 in enter-
prise I. On the other hand, Table 8 shows the total cash-in The main objective is developing a tool that will help
and cash-out values for the second enterprise and values contractors maximize their profits. In order to achieve
of the other financial parameters along with the total this goal, a comprehensive model of various cash pro-
duration of projects. The maximum negative cash flow blems was constructed. For this, we will use two sce-
is −2,646,408 at the end of the 13th month, and the profit narios. The complete GA procedure is coded in MATLAB
of the projects is +1,726,720 in enterprise II. The GA and then used to find an optimal time schedule for the
system can then be used to search for optimum schedules problem at hand for the purposes of implementation
that minimize maximum negative cash flow and optimize Scenario I: Maximizing profits while minimizing nega-
project profit. Explanation of calculation of cash flows: tive cash flow using a GA technique, we can find a solution
• Bill to owner: The value of progress payment to the to the problem of creating schedules that have the mini-
contractor without discounts of retention and taxes. mizing negative cash flow. The following are the objective
• Total receipts: Total progress payment to the contractor function and constraints for the two enterprises involved in
subtracted from the discounts of retention and taxes. this scenario:
 Time and finance optimization model for multiple construction projects  279

Table 13: Initial schedule and optimized schedule for scenarios in Table 14: Initial schedule and optimized schedule for scenarios in
enterprise I enterprise II

Activity Original Optimized Optimized Activity Original Optimized Optimized

schedule schedule start schedule start schedule schedule start schedule start
start time time for time for start time time for time for
scenario I scenario II scenario I scenario II

Project I Project I
A1000 90 90 90 A1000 1 1 1
A1010 90 124 109 A1005 61 61 61
A1020 185 185 188 A1010 61 69 75
A1030 232 232 241 A1015 61 69 61
A1040 278 278 291 A1020 121 138 143
A1050 319 319 342 A1025 141 141 141
A1060 335 335 368 A1030 141 161 141
A1070 395 395 438 A1040 121 134 121
A1080 225 240 283 A1045 181 183 195
A1090 249 292 438 A1050 241 241 241
A1100 436 436 491 A1060 321 321 321
A1120 466 466 521 A1090 206 298 280
A1130 466 472 532 A1095 206 206 206
A1110 466 466 530 A1100 386 386 386
A1140 487 487 542 A1110 386 391 386
Project II A1120 421 421 451
A1000 1 1 1 Project II
A1020 16 16 26 A900 123 123 123
A1084 275 298 306 A1000 173 173 173
A1085 310 344 382 A1010 173 182 173
A1030 91 91 123 A1020 233 248 233
A1040 136 136 169 A1030 233 233 233
A1050 211 211 256 A1040 233 298 283
A1060 256 256 301 A1050 328 328 328
A1070 286 286 336 A1060 413 413 413
A1080 361 361 415 A1070 488 488 488
A1090 401 401 464 A1079 233 401 371
A1100 421 421 498 A1080 533 533 533
A1120 391 439 517 A1100 563 563 563
A1130 391 402 453 A1110 563 563 563
A1140 391 440 507 A1120 593 593 620
A1110 436 436 515 Project III
A1150 466 466 545 A1000 184 184 184
Max –693,784 –634,514 –612,768 A1005 244 244 244
negative A1010 244 284 244
cash flow A1020 314 314 314
Profit 304,451 304,451 200,116 A1050 379 379 379
A1070 424 424 450
A1080 379 394 419
Max –2,646,408 –2,529,324 –2,597,290
Minimize: Ft , (9) negative
Est ≤ Ast ≤ Lst , (10) cash flow
Profit 1,726,721 1,726,721 1,537,632
where Ft is the maximum cumulative cash flow, Est is the
early start time for activity according to time schedule, Ast
is the activity start data in the project, and Lst is the late
start time for activity according to time schedule. random schedules generate corresponding cash require-
To generate schedules, critical path activities are ment profiles. The GA procedure then looks for a schedule
started early and non-critical activities are started at that generates the minimizing negative cumulative cash
random while maintaining a link between them. These flow while keeps maximizing profit. Tables 9 and 10
280  Musaab Falih Hasan and Sawsan Rasheed Mohammed

show the optimized cash flow calculation in the scenario I such as a due date and initial negative cash and profit.
in two enterprises. The model can smooth financial pressure by shifting
Scenario II: Maximizing profit by extending the pro- activities’ schedules without delaying or extending the
ject and reducing the problem of negative cash flow while time of the project (delaying completion time). The results
maintaining maximum profit. show that negative cash flow is minimized from −693,784
Maximize :G. (11) to −634,514 in enterprise I and −2,646,408 to −2,529,324 in
enterprise II in the first scenario and also results show that
Random activity start times are used to generate new negative cash flow is minimized to −612,768 with a profit of
time schedules while maintaining dependency between +200,116 in enterprise I and to −2,597,290 with a profit of
activities. It is possible to see how much cash each of these +1,537,632 in enterprise II in the second scenario. Because
random schedules requires. Afterwards, the GA procedure of this, the model’s proposed solution helps contractors
looks for a schedule that generates the maximum profit, meet their financial obligations when faced with sche-
while also generating the minimum of cumulatively nega- duling problems.
tive cash flow possible. Tables 11 and 12 show the opti-
mized cash flow calculation in the scenario II in two Acknowledgments: This project is supported by the Ministry
enterprises. of Planning, Iraq, and the University of Baghdad in testing and
Tables 13 and 14 show comparison between the initial supplying raw materials needed to achieve this work. The
schedule and the optimized schedule with activities’ new author gratefully acknowledges the support received.
start dates in enterprises. The first scenario is to minimize
negative cash flow and keep or maximize the profit. The Funding information: The authors state no funding involved.
results show that negative cash flow minimized from
−693,784 to −634,514 in enterprise I and from −2,646,408 Author contributions: All authors have accepted respon-
to −2,529,324 in enterprise II with keeping the profit. On sibility for the entire content of this manuscript and
the other hand, the optimized schedule of the project in approved its submission.
noncritical activities’ start times have changed to reach the
optimum schedule with the minimum negative cash flow Conflict of interest: The authors state no conflict of
and optimum profit. As well as the second scenario is interest.
maximizing profit by extending the project and reducing
the problem of negative cash flow. The results show that
negative cash flow is minimized to −612,768 with a profit
of +200,116 in enterprise I and to −2,597,290 with a profit
of +1,537,632 in enterprise II. On the other hand, the
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