Scheduling a single machine to maximize net present value

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Abstract
This paper investigates scheduling a single productive resource (machine) such that the net present value of the resulting cash flow stream is maximized. The static single machine setting provides an ideal context in which to develop high value scheduling policies. A job release rule (RDE) and a job dispatch rule (MTP) are developed through a marginal cost analysis of the NPV objective, and the composite MTP/RDE scheduling rule is extensively tested against several other benchmark heuristics obtained from the literature. Results indicate that the MTP/RDE rule outperforms the benchmark heuristics by a substantial margin in providing high value schedules. Additionally, sensitivity analysis shows that the MTP/RDE rule is robust in relation to parameter settings and misspecified cost data, suggesting its applicability to real-world production settings.

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