Journal of Intelligent & Fuzzy Systems 23 (2012) 203–215 203

DOI:10.3233/IFS-2012-0510
IOS Press

A Fuzzy Simulated Annealing approach

for project time-cost tradeoff
Milos Milenkovica,∗ , Nebojsa Bojovica , Rita Almeida Ribeirob and Natasa Glisovicc
a TheFaculty of Transport and Traffic Engineering, University of Belgrade, Belgrade, Serbia
b UNINOVA Campus da FCT/UNL, Monte de Caparica, Caparica, Portugal
c Mathematical Institute of The Serbian Academy of Sciences and Arts, Belgrade, Serbia

Abstract. Managers often face difficulties when making project decisions that involve large number of interrelated activities –
the planning and scheduling of which is project management. Most problems often arise in areas such as product development,
production planning and control and setting up the production facilities. One important aspect of project management is activity
crashing, i.e. reducing the activity time by adding more resources such as workers, overtime and so on. It is important to decide
the optimal crash plan to complete the project within the desired time period. A fuzzy simulated annealing crashing method
is introduced in this paper to evaluate project networks and determine the optimum crashing configuration that minimizes the
average project cost, due to lateness penalties and crashing costs in the presence of vagueness and uncertainty. Through a real
project example the proposed approach is shown effective and efficient in conducting time-cost tradeoff analysis.

Keywords: Project management, project crashing, fuzzy linear programming, simulated annealing

1. Introduction time scale. Its disadvantage is that the interdependency

“Crashing” is a tool for project management that is
used by many companies to help improve performance
and competitiveness (e.g. [12, 15, 18]). Projects and
their execution, in general, require resources. Project
management, which is characterized by techniques,
intended to provide a better use of project resources
could positively impact the profitability of a company.
Successful applications of project management tech-
niques in various projects are numerous and mostly
reflect very large time and financial savings.
In the past, the scheduling of a project (over time) was
done with little planning. The one of the best-known
“planning” tools is the Gantt bar chart, which specifies
the start and finish times for each activity on a horizontal
∗ Corresponding author. Milos Milenkovic, The Faculty of
Transport and Traffic Engineering, University of Belgrade,
Belgrade 11000, Serbia. Tel.: +381 11 3091343; E-mail:
m.milenkovic@sf.bg.ac.rs.
between the different activities (which mainly controls
the progress of the project) cannot be determined from
the bar chart. The growing complexities of today’s
projects have demanded more systematic and more
effective planning techniques with the objectives of
optimizing the efficiency of executing the project. Effi-
ciency here implies affecting the utmost reduction in
time required to complete the project while accounting
for the economic feasibility of using available resources
(Taha [25]).
An important aspect of project management is risk
management. Different types of risk are present in any
given project, but the emphasis of this research will be
focused on schedule/time risk and associated costs. The
schedule/time risk essentially implies not completing
project activities on time, resulting in a late completion
of the project. Late project completion generally has
negative effects for the company such as penalty costs
and customer dissatisfaction. If a project is running late

1064-1246/12/$27.50 © 2012 – IOS Press and the authors. All rights reserved
204 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
project managers might be able to bring the project
back on track by incorporating additional resources. In
project management, this method of mitigating risk is
known as crashing.
Rosenau and Githens [24] state crashing is “spending
more money on the project in order to speed up accom-
plishment of scheduled activities”. Since crashing a
project represents additional costs, crashing decisions
need to be made in a cost-effective way. When crash-
ing a project the tradeoff between the crashing cost and
the penalty cost needs to be evaluated. The crashing
concept is focused on reducing the time of the activ-
ities on the critical path. The critical path is the one
that can cause a delay of the project because there is no
slack on that path. The traditional method of crashing
CPM/PERT networks ([25, 27]) only considers aver-
age activity times for the calculation of the critical path,
ignoring the uncertainty related with the duration of the
activities.
Time-cost tradeoff problems can be modeled by
deterministic or uncertain approaches. Deterministic
approaches assume that project parameters are pre-
sented as exact values. However, there are many
cases where a great uncertainty in project parameters
exists. One way to handle uncertainty is via stochas-
tic time-cost tradeoff approach based on probability
theory. It requires a prior predictable regularity or a
posterior frequency distribution to construct the prob-
ability distribution of activity times. However, in real
world applications, sometimes we have to use human
judgment instead of stochastic assumptions to deter-
mine activity times. An alternative way to deal with
imprecise data is to employ the concept of fuzziness,
where the vague activity times can be represented by
fuzzy sets [32]. The main advantages of methodolo-
gies based on fuzzy theory are that they do not require
prior predictable regularities or posterior frequency
distributions, and they can deal with imprecise input
information containing feelings and emotions quanti-
fied based on the decision maker’s subjective judgment.
This paper adopts an approach combining the Sim-
ulated Annealing algorithm and fuzzy set theory to
develop a time-cost tradeoff model under uncertainty.
A fuzzy linear programming (FLP) time-cost tradeoff
model is presented and solved by Simulated Annealing
(SA). The results obtained by SA are compared with
those of traditional approach for solving FLP problems.
The proposed method solves the time-cost tradeoff
problems under an uncertain environment and proves
suitable through a real example of franchising imple-
mentation project for the Serbian Postal Company.
The paper is organized in six sections including the
first section for the introduction of the problem. Sec-
tion 2 gives a brief summary of past work aimed at
project activity crashing methods. In Section 3 we made
an introduction to the fuzzy optimization, and present
a flexible fuzzification model for fuzzy optimization
problems. Then, in Section 4 we introduced the concept
of a fuzzy simulated annealing algorithm as a searching
tool for obtaining the solution for fuzzy optimization
problems. In Section 5, we present the project time-
cost tradeoff problem in the uncertainty environment
and we apply the proposed methodology on a real case
study. Finally, in Section 6, we conclude this paper with
some perspectives on further developments.
2. Related work
Time/cost trade-offs in project networks have been
the subject of intensive research since the develop-
ment of the critical path method (CPM) in the late
50 s. Time/cost behavior in a project activity basically
describes the trade-off between the duration of the activ-
ity and its amount of non-renewable resources (e.g.
money) committed to it. It is generally accepted that the
trade-off follows a non-increasing pattern, i.e. expedit-
ing an activity is possible by allocating more resources
(i.e. at a larger cost) to it. There are several contribu-
tions in the literature, related with our work, and next
we summarize the most relevant ones.
Demeulemeester et al. [8] described two new algo-
rithms for optimally solving the discrete time-cost
trade-off problem in deterministic activity-on-arc net-
works under limited resource availability. Authors
proposed two procedures, both based on a special proce-
dure for finding the minimal number of node reductions
needed to transform a general network to a series-
parallel network. The second algorithm minimizes the
computational effort in enumerating alternative modes
through a Branch and Bound search tree.
Gutjahr et al. [12] introduce a stochastic optimiza-
tion approach to determine a set of efficient measures
that crash selected activities in a stochastic activity
network. The proposed approach modifies the conven-
tional stochastic Branch-and-Bound, using a heuristic
method instead of an exact one to solve the deterministic
sub problem. This modification reduces computational
time and by doing so provides an appropriate method for
solving various related applications of combinatorial
stochastic optimization.
 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
Kuhl and Tolentino-Pena [15] introduced a dynamic
simulation-based crashing method to evaluate project
networks and determine the optimum crashing config-
uration that minimizes the average project cost due to
lateness penalties and crashing costs. By reevaluating
the project network possible adjustments to the crashing
strategy may be identified and implemented. The out-
put of the method includes a distribution of the project
completion time, a distribution of the project total cost,
and the project cost savings.
Vanhoucke et al. [28] described a solution procedure
for the deadline problem in which three special cases of
time switch constraints are involved. These constraints
impose a specified starting time on the project activities
and force them to be inactive during specified time peri-
ods. They propose a branch-and-bound algorithm and
a heuristic procedure which both make use of a lower
bound calculation for the discrete time/cost trade-off
problem.
Deckro et al. [7] developed a series of nonlinear
time/cost tradeoff models for project management. A
base model with quadratic cost relations is developed
and then extended to include other operational consid-
erations. The use of nonlinear functions to describe
time/cost relationships in project scheduling environ-
ments permits a more accurate representation of the
operational setting than is possible with linear or piece-
wise linear approximations.
Moussourakis and Haksever [18] presented a flexible
mixed integer-programming model for the solution of
the time/cost tradeoff problem. The model presented in
this paper makes minimal assumptions and accommo-
dates any type of cost function that is linear, piecewise
linear or discrete. The model can be used for answering
various “what if” questions that may be very helpful
to a project manager in making rational decisions. The
basic model minimizes the total cost which is the sum
of direct and indirect costs, subject to a project deadline
constraint. A simple modification in the model changes
the focus from minimizing total cost to minimizing
project completion time subject to a resource constraint.
Phillips and Dessouky [20] proposed a solution
procedure for solving the project time/cost tradeoff
problem of reducing project duration at a minimum
cost. They obtained a solution by locating a minimal cut
in flow network derived from the original project net-
work. Minimal cut is then utilized to identify the project
activities which should experience a duration modifica-
tion in order to achieve the total project reduction.
Feng et al. [10] developed a hybrid approach that
combines simulation techniques and genetic algorithms
205
to imitate the probabilistic nature of project networks
throughout the search of optimal solutions. The results
showed that GAs can be integrated with simulation
techniques to provide an efficient and practical means
of assessing project time and cost risks.
Tareghian and Taheri [26] proposed a meta-heuristic
solution procedure for the discrete time, cost and quality
tradeoff problem. This problem involves the schedul-
ing of project activities in order to minimize the total
cost of the project while maximizing the quality of the
project and also meeting a given deadline. They applied
electromagnetic scatter search to solve this problem.
Yang [29] developed and tested a particle swarm opti-
mization (PSO) algorithm for project crashing analysis.
The optimization results include direct and project cost
curves, both of which can assist project managers in per-
forming what-if analyses on the project deadline and
budget. The application of the proposed algorithm is
demonstrated through an example project and a real-life
case.
Yang [30] proposed elitist PSO algorithm to facili-
tate bicriterion time-cost trade-off analysis. Algorithm
modifies a population based search procedure, parti-
cle swarm optimization, by adopting an elite archiving
scheme to store nondominated solutions and by aptly
using members of the archive to direct further search.
Ng and Zhang [19] presented a multiobjective
approach known as the ant colony system to model time
cost optimization problems so as to optimize the total
project duration and total cost simultaneously.
Zheng et al. [31] introduced a multiobjective
approach that aims to optimize total time and total cost
simultaneously by utilizing appropriate GAs concepts
and tools. The model introduces a MAWA (modified
adaptive weight approach) to replace traditional fixed
or random weights and integrates time and total cost
into a single objective for simulation. The concept is
illustrated through a simple manual simulation and the
results indicate that the model could assist decision
makers in concurrently arriving at an optimal project
duration and total cost.
Leu et al. [17] proposed a flexible approach employ-
ing genetic algorithms (GAs) and fuzzy set theory to
develop a time-cost trade-off model for construction
projects under uncertainty. They treat the activity dura-
tion as a fuzzy number. The main focus of the paper was
to determine the impact of uncertain activity durations
on project direct costs.
Ke et al. [13] proposed three new fuzzy time-cost
trade-off models, the α-cost minimization model, the
expected cost minimization model and the credibility
206 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
maximization model of the time-cost trade-off prob-
lem in which the uncertainty of the activity durations
was described by credibility theory. To solve the mod-
els, a hybrid intelligent algorithm integrating the fuzzy
simulation and genetic algorithm was built.
Feyzan and Gungor [11] presented a practical appli-
cation of fuzzy goal programming in a real-life project
network problem with two objectives as minimum com-
pletion time and crashing costs wanted to be optimized
simultaneously. Fuzziness in the problem stems from
the imprecise aspiration levels attained by the deci-
sion maker to both objectives. Comparisons between
solutions of fuzzy goal programming, fuzzy linear pro-
gramming, lexicographic maximization method and
linear programming are also presented.
Eshtehardian et al. [9] presented a multi-objective
genetic algorithm to solve the discontinuous and multi-
objective fuzzy time-cost model. Fuzzy numbers are
used to address the uncertainties in activities execution
times and cost. The proposed approach identifies the
best set of implementation options defined by the sets
and non-dominated solutions.
Arikan et al. [2] presented a practical application of
fuzzy goal programming (FGP) in a real-life project
network problem with two objectives, the minimum
completion time and crashing costs. Fuzziness in the
problem stems from the imprecise aspiration levels
attained by the decision maker to both objectives.
Comparisons between solutions of fuzzy goal pro-
gramming, fuzzy linear programming, lexicographic
maximization method and linear programming are also
presented.
Abbasnia et al. [1] developed an approach for solving
time-cost tradeoff problem affecting uncertainties on
activity cost. Fuzzy logic theory is employed to consider
affecting uncertainties in total direct and indirect cost of
a construction project. Non-dominated Sorting Genetic
Algorithm, a multi objective optimization algorithm is
applied to provide a trade-off between time and total
cost. Project manager have different non-dominated
solutions or pareto solutions which are dependent on
his measure of accepted risk through applying ␣ cuts
methods in fuzzy logic theory.
Jin et al. [5] presented a GA-based fully fuzzy opti-
mal time-cost trade-off model based on fuzzy sets and
genetic algorithms. Parameters and variables are given
by fuzzy numbers. GAs is adopted to search for the
optimal solution to this model. The method solves
the time-cost trade-off problems under an uncertain
environment and is proved practicable through a giving
example in ship building scheduling.
3. Fuzzy optimization
The main objective of a fuzzy optimization method
is to find the “best” solution (decision alternative) in
the presence of incomplete information, i.e. imprecise
information and/or in the presence of “vague” limits in
the information. In general, there exist following forms
of imprecision in fuzzy optimization problems:
• Imprecision in the constraints boundaries, this
implies the fuzzification of the inequalities limits;
• A fuzzy goal is imposed on the objective func-
tion. Essentially this implies fuzzifying the utility
function by considering a limiting goal;
• Compound imprecision. This implies combina-
tions of the above sources of imprecision;
• The parameters (coefficients) of the variables of
the constraints are not known precisely. This
means that coefficients are fuzzy numbers;
• The coefficients of the variables in the objective
function are not known precisely. This means that
coefficients are fuzzy numbers;
• All possible combinations of uncertainty.
A classical linear optimization problem consists on
minimizing (maximizing) a certain objective function
subject to a set of constraints. Formally for the mini-
mization problem,
min Z = cT x (1)
Ax{≥, ≤, =}B (2)
x≥0 (3)
In this paper we discuss the fuzzification of a lin-
ear programming model to deal with project crashing
problems in uncertain environments, where we have
imprecision in the constraints boundaries and also in
the objective function (Zimmermann [32], Bector and
Chandra [3]). Therefore, the fuzzy version of this prob-
lem with a fuzzy objective and a set of fuzzy constraints,
which are of the “less or equal type” or “greater or
equal” type is generally formalized as,
min Z̃ = cT x (4)
Ax{≤
˜ , ≥}B
˜ (5)
x≥0 (6)
where Z̃ represents a fuzzy goal, cT is the vector of
crisp costs, A is the matrix that contains the fuzzy coef-
ficients of the objective and of the constraints and B̃
 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
is the corresponding vector of the fuzzy limits of the
resources.
The first model to solve decision problems in a fuzzy
environment was proposed by Bellman and Zadeh [4].
These authors consider that the decision on each alter-
native results from the intersection of the objectives
and the constraints and that the union of the decisions
on each alternative gives the “best” decision. A fuzzy
decision can then be seen as an intersection of goals and
constraints, which mean that it is a symmetric model. A
maximization fuzzy decision is defined as a point in the
space of alternatives, in which the membership function
of a fuzzy decision reaches its maximum value.
In general, the process of solving a fuzzy optimiza-
tion problem consists on the following steps:
• Depending on the problem type, formalize it in
the form of a linear programming problem or in
the form of a multiobjective form, or even as a non
linear programming problem.
• If we intend to fuzzify the objectives, define the
goal for those objectives.
• Select the membership functions to represent the
fuzzification of any parameter and constraints,
such as triangular, sinusoidal, trapezoidal, or other.
• Define the membership functions with the nec-
essary parameters for the preference value and
tolerances.
• Define thresholds for the allowable degree
of the deviations/violations in the constraints
satisfaction.
• Define the aggregation operator to combine the
constraints (and goals), e.g. the t-norm operator
minimum.
• Solve the problem.
The first proposal to formalize a fuzzy linear pro-
gramming problem is due to Zimmermann [32]. This
author considers that there exist flexibility in the viola-
tion of both constraints and objective(s). This model is
based on the symmetric model of Bellman and Zadeh
[4].
⎧
⎪ 1
⎨ Ai x − b i
µi (Ai x) = 1 −
⎪
⎩0 pi
⎧
⎪ 1
⎨ Ai x − b i
µi (Ai x) = 1 +
⎪
⎩0 pi
207
3.1. Flexible fuzzification model
Ribeiro and Moura-Pires [21–23] proposed a method
for fuzzy optimization problems that include fuzzy
coefficients either in the objective function or in the
constraints. The whole process is designated as “flex-
ible approach” for fuzzy optimization problems in its
formalization is: assuming the formulation for fuzzy
optimization problems defined in (4–6), we made a
transformation into the following system of equations:
max Z = cT x (10)
x
max M = ∩(µ0 (cT x), µ(Ai x), µ(Ai x)) (11)
Subject to:
cT x ≤ Z0 + (1 − µ0 (cT x))p0 (12)
Ai x ≤ bi + (1 − µi (Ai x))pi (i = 1, 2, ..., m)(13)
Ak x ≥ bk − (1 − µk (Ak x))pk (k = 1, 2, ..., n) (14)
µ0 (cT x), µi (Ai x), µk (Ak x) ∈ [0, 1] (15)
x≥0 (16)
It should be noted that all the fuzzy parameters are
presented with a tilde on the top. The ∩ symbol repre-
sents the intersection of all membership values. The
second objective represents the maximization of the
intersection of all membership values, i.e. this goal
gives the best value of the minimum (intersection) of
the violations of constraints.
The most frequently used membership functions -
to represent the deviations accepted for the fuzzy
objectives (goals), constraints and/or coefficients - are
triangular functions. In particular, let µ0 denote the
membership function for the objective function and µi
or µk denote the membership functions for the ith or kth
constraint. Let p0 and pi and pk be the permissible tol-
erances for the objective function and the constraints.
Then we may decide µ0 and µi or µk to be either
non-increasing or non-decreasing as well as continuous
membership functions as follows:
Ai x
bi
bi < Ai x
bi + pi (17)
Ai x > bi − pi
Ai x  bi
bi − pi
Ai x < bi (18)
Ai x < bi − pi
208 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
⎧
⎪ 1
⎨ Z0 − c T x
T
µ0 (c x) = 1 +
⎪
⎩0 p0
Function (17) corresponds to the membership func-
tion for constraints “less or equal”, function (18) is the
membership function for the constraints of the “greater
or equal” type, and function (19) is the membership
function of for objective function of minimization type.
4. The concept of Simulated Annealing
Simulated Annealing (SA) is a general purpose meta
heuristic method that has been applied successfully to
a number of combinatorial optimization problems. The
reasoning of simulated annealing is derived from the
physics of annealing substances. Simulated annealing
seeks to minimize an energy function, which in com-
binatorial optimization is the objective function. At the
beginning of the annealing process there is a high like-
lihood of accepting any transition made in the search
space (whether it improves the solution or not) rather
than later on the run. Each transition consists of choos-
ing a variable at random and giving it another value (also
at random). This process is done in accordance with an
exponential acceptance function based on a parame-
ter called temperature. The temperature is decremented
until it is quite small and hence very few uphill moves
(where a worse solution may replace the current solu-
tion) are accepted. Since simulated annealing can make
these uphill moves, settling into local optima is poten-
tially avoided. The way the temperature is controlled
is referred to as the cooling schedule (Laarhoven and
Aarts [16]).
Four basic requirements for using the SA algorithm
in combinatorial optimization problems are:
• Concise description of the problem;
• Random generation of the changes from one con-
figuration to another;
• An objective function containing the utility func-
tion of trade-offs;
• The initial state, the number of iterations to be
performed at each temperature and its annealing
scheme.
The objective of the simulated annealing algorithm
implementation is to solve fuzzy optimization model
presented in the previous chapter by maximizing the
aggregation of the membership values of the goals and
cT x < Z0
Z0 ≤ cT x ≤ Z0 + p0 (19)
cT x > Z0 + p0
constraints. Its implementation is defined by following
flowchart (Fig. 1).
The variable k is the counter for the number of
constraints. Min represents the aggregation of the
memberships of the fuzzy constraints. As aggregation
operator the t-norm min is used. The variable  rep-
resents the difference between the previous Min and
new Min. This represents the old and new energy
states difference. The probability function of moving
to a smaller energy state is given by exponential of 
divided by the control parameter T. The smaller the
temperature the less probable any change will occur.
The algorithm includes also N(t) as the number of
generated neighbors. T(t) is decreasing function of tem-
perature. The algorithm stops when the temperature is
less than a defined limit value. As presented in previ-
ous chapter, the membership functions of the fuzzy goal
and constraints used in this application are triangular
functions.
5. A Fuzzy Simulated Annealing approach
for project time-cost tradeoff
In traditional approaches for crashing project time
based on Critical Path Method, the first task is to identify
the normal critical path and the critical activities. Then
it is required to determine the crash cost per time period
(cost-time slopes) for various activities. In most of the
existing time-cost tradeoff methodologies the activity
time-cost relationships are assumed to be deterministic
(linear, convex, continuous) or fuzzy. Without loss of
generality, for easy implementation, in this paper the
relationship between normal cost and crash cost with
respect to activity time is assumed to be linear [6, 14]:
Crash Cost − Normal Cost
Slope =
Normal Time − Crash Time
The nonlinear cases can be generalized straightfor-
ward from this case. The next step is to identify the
activity on the critical path with the smallest crash cost
per time period. This activity will be crashed to the
maximum possible extent or to the point at which man-
agement’s desired deadline has been reached. Then it
should be checked that the critical path being crashed is
 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
Fig. 1. Simulated Annealing block diagram for maxmin approach.
still critical. If the path is still critical then the crashed
activity is the one with second lowest cost-time slopes
and this process is continued until the goal has been
reached. If, a reduction in a critical activity time causes
a non-critical path or paths to become critical, then
the crash will be continued along with the new criti-
cal path based on the lowest cost time slopes of the new
path.
Now, let us introduce a linear programming formula-
tion for the optimal project crashing problem. The basic
data requirements are:
• We have to know the project network with activity
time;
• To what extent an activity can be crashed;
• Crash cost associated with per unit of time for all
activities.
As we know, a project is the combination of some
activities, which are interrelated in a logical sequence in
the sense that the starting of some activities is dependent
upon the completion of some other activities. These
activities are jobs which require time and resources to
209
be completed. Using events specifies the relationship
between the activities. An event represents a point in
time that implies the completion of some activities and
the beginning of new ones, the beginning and end point
of an activity are thus expressed by two events.
Now let’s define the variables of the problem:
• ti – the time when an event i will occur, measured
from the start of the project, i = 1, ..., n;
• tj – the time when an event j will occur, measured
from the start of the project, j = 1, ..., n;
• tij – Amount of time (in terms of days, weeks, or
months or some other units) for each activity i − j;
• tijn – Normal time (in terms of days, weeks, or
months or some other units) for each activity
i−j ;
• tiju – Crash time (in terms of days, weeks, or months
or some other units) for each activity i − j
• tij – Amount of time (in terms of days, weeks,
or months or some other units) that each activity
i − j can be crashed, i = 1, . . . , n, j = 1, . . . , n;
• Cij – crash cost per unit of time for activity i − j;
• T – Proposed project deadline date;
210 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff

Hence, the linear programming formulation of the
time-cost tradeoff problem is as follows:
n 
n Before modeling the problem, it is required to deter-

Minimize Z = Cij tij
i=1 j=1
Subject to:
tij ≤ tijn − tiju , i = 1, ..., n, j = 1, ..., n, i =
/ j (21)
tj − tij − ti ≥ tij , i = 1, ..., n,
j = 2, ..., n, i =
/ j
tn ≤ T
The objective (20) is to minimize the cost of crashing
the total project. Constraints (21) represent crash time
constraints. The time to complete an activity can be
reduced by increasing the resources or by improving the
productivity which also require additional resources.
But it is not possible to reduce the time required to
complete an activity after a certain threshold limit. Con-
straints (22) describe the network. As we mentioned,
activities of a project are interrelated, the starting of
some activities is dependent upon the completion of
some other activities. Since event 1 will start at the
beginning of the project, we begin by setting the occur-
rence time for event 1 equals to zero. Constraints (23) is
the project completion constraint. This constraint will
recognize that the last event must take place before the
project deadline date. However, in real world for many
projects we have to use human judgment for estimating.
A way to deal with this imprecise data is to employ the
concept of fuzziness.
In the next chapter, for a real project, we fuzzified the
LP formulation according to the approach discussed in
Chapter 3. Then the Simulated annealing algorithm is
used and the obtained results are compared with those
of crisp linear programming and Zimmermann’s fuzzy
linear programming approach.
5.1. Fuzzy Simulated Annealing crashing
methodology applied to a project of
franchising implementation
For the sake of testing our approach we used the
data from the project of franchising implementation
managed by the Serbian Postal Company. All activi-
ties included in the project as well as needed time and
costs, are given in Table 1. For the purpose of modeling
the problem, it is necessary to define the activities in
terms of starting and ending points (Fig. 2). Moreover,
as we can see the total number of events is 19.
(20) mine the extent of the project crashing time. According
to the Critical Path Method (CPM), the critical path for
normal length of activities is path B-H-M-O-P-Q-S-W,
and the time length of this path is 280 time units (in
this case days). The critical path based on crash time
of activities remain the same as previous B-H-M-O-P-
Q-S-W, and the time length is 262 days. Suppose now
that we want to adjust the deadline of the project on its
expected completion date based on crash time.
(22)
According to LP formulation (20–23) of crashing
(23) project time, the problem for this particular case study
can be interpreted as:
Z = 30t12 + 30t13 + 20t24 + 20t28
+ 15t25 + 16t36 + 20t39 + 18t37
+ 25t411 + 20t810 + 25t811 + 25t911
+ 24t712 + 30t1112 + 120t1213 (24)
+ 15t1314 + 10t1415 + 26.67t1416
+ 20t1518 + 20t1517 + 20t1618
+ 15t1619 + 16.67t1819 → Minimize
Subject to:
Crashing time constraints:
t12 ≤ 1 (25)
t13 ≤ 1 (26)
t1819 ≤ 1 (27)
Network constraints:
t1 = 0 (28)
t2 − t1 + t12 ≥ 5 (29)
t3 − t1 + t13 ≥ 5 (30)
t19 − t18 + t1819 ≥ 62.5 (31)
Project completion constraint:
t19 ≤ 262 (32)
The optimal solution for this exact formulation of
project crashing problem, obtained using the CPLEX
software package is given in Table 3.
Now, we will consider that in reality, unpredictable
situations may affect on the project activity times i.e.
after obtaining crisp results we should relax the crashing
 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff 211

Table 1
Activities, time, costs and relationships for the project network used for the example
Activity Description Depends on Normal time Crash time Normal cost Crash cost
(days) (days) (monetary units) (monetary units)
A Resource identification – 5 4 120 150
B Defining components and deadlines – 5 4 120 150
C Market segmentation by priority A 10 9 170 190
D Profile preparing for each market A 85 82 1470 1530
E Market analysis and franchise A 70 68 1210 1240
location identifying
F Identification of common outputs for B 22.5 20 390 430
rationalization
G Selling information preparation B 21 20 360 380
H Establishing the project budget and B 62.5 57.5 1080 1170
estimated costs
I Developing the process for C 30 28 740 790
categorization of outputs based on
functions preferred by Post
Company
J Developing the criteria for franchise D, E 5 4.5 120 130
selection
K Developing the process for franchise D, E 10 8 250 300
selection
L Developing the process of contract F, G 20 18 490 540
management
M Establishing the project budget and H 62.5 60 1540 1600
estimated costs
N Preparing the draft of plan I, J, K, L 10 9 250 280
O Presenting to superior M, N 5 4 0 120
P Evaluation of existing contract model O 20 18 300 330
Q Translation of contract on Serbian P 10 9 120 130
R Legal checking P 10 8.5 100 140
S Making necessary changes to adapt Q 52.5 50 1000 1050
in business environment
T Development of basic contract Q 50 47 1000 1060
models for each output
U Creating and implementation of R 30 25 600 700
franchise structure of payment
V Provision of all necessary R 45 43 600 630
permissions from higher instances
W Establishing the project budget and S, Y, U 62.5 59.5 1080 1130
estimated costs

Fig. 2. Network diagram of the project.

212 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff

Table 2
Tolerance intervals for project time-cost tradeoff problem
Constraints of “less or equal” type Constraints of “greater or equal” type
Lower bound Deviation Upper bound Lower bound Deviation Upper bound
(ci ) (di ) (ci +di ) (ci -di ) (di ) (ci )
Z = c0 = 350 100 450 4 d25 = 1 c25 = 5
c1 = 1 d1 = 1 2 4 d26 = 1 c26 = 5
c2 = 1 d2 = 5 6 9 d27 = 1 c27 = 10
c3 = 1 d3 = 1 2 69 d28 = 1 c28 = 70
c4 = 3 d4 = 2 5 20.5 d29 = 2 c29 = 22.5
c5 = 2 d5 = 1 3 60.5 d30 = 2 c30 = 62.5
c6 = 2.5 d6 = 5 7.5 82 d31 = 3 c31 = 85
c7 = 1 d7 = 0.5 1.5 −1 d32 = 1 c32 = 0
c8 = 5 d8 = 0.5 5.5 20 d33 = 1 c33 = 21
c9 = 2 d9 = 1 3 −1 d34 = 1 c34 = 0
c10 = 0.5 d10 = 0.5 1 3 d35 = 2 c35 = 5
c11 = 2 d11 = 1 3 9 d36 = 1 c36 = 10
c12 = 2 d12 = 0.5 2.5 −1 d37 = 1 c37 = 0
c13 = 2.5 d13 = 2 4.5 29 d38 = 1 c38 = 30
c14 = 1 d14 = 2 3 8 d39 = 2 c39 = 10
c15 = 1 d15 = 0.5 1.5 57.5 d40 = 5 c40 = 62.5
c16 = 2 d16 = 0.5 2.5 4 d41 = 1 c41 = 5
c17 = 1 d17 = 0.5 1.5 17 d42 = 3 c42 = 20
c18 = 1.5 d18 = 1 2.5 9 d43 = 1 c43 = 10
c19 = 2.5 d19 = 1 3.5 8 d44 = 2 c44 = 10
c20 = 3 d20 = 1 4 47 d45 = 3 c45 = 50
c21 = 5 d21 = 1 6 –2 d46 = 2 c46 = 0
c22 = 2 d22 = 1 3 52 d47 = 0.5 c47 = 52.5
c23 = 3 d23 = 1 4 29 d48 = 1 c48 = 30
c24 = 262 d24 = 5 267 62.5 d49 = 0 c49 = 62.5
44 d50 = 1 c50 = 45

time constraints and the network constraints to reflect considered project crashing problem. In the implemen-
the real situation during the project execution. Hence, tation of the SA algorithm it is needed to choose the
we fuzzified the problem, considering the tolerance following parameters:
intervals for the objective function and all constraints.
• How to generate a state y neighbor of x;
The total number of constraints is 51, and for each par-
• Which aggregation function to use;
ticular constraint, different permissible tolerances are
• The number of neighbours to generate - N(t);
defined in consultation with experts involved in real-
• The decreasing temperature function - T (t);
ization of considered project (Table 2).
• The stopping criterion.
We first solved the problem by using the Zimmer-
mann’s approach, which considers that in a fuzzy The choice of how to generate a state y as a neighbour
environment there is no difference between goals and of x, is done by defining a new state which is a random
constraints. Within this approach the objective moves point y where the distance to the point x is random and
into a constraint with a defined stretched boundary less than t, defined by
as any other fuzzy constraint. The resolution process ⎧
⎪
⎪ 0.5 if t < 100
proceeds to transform the problem into a crisp one, ⎪
⎪
using the objective for the maximization of the min- ⎨ 1.0 if 100 ≤ t < 200
η(t) =
imization of the membership values of the constraint ⎪
⎪ 1.5 if 200 ≤ t < 300
⎪
⎪
deviations, determined in functions like those in expres- ⎩ 2.5 if t ≥ 300
sions (17–19). The results of the considered problem
by using fuzzy Zimmermann approach are given in For the aggregation function the intersection of all
Tables 3 and 4. membership values of the constraints is selected, and
Next, on the base of flexible fuzzification model the operator used is the t – norm min. The intersection
presented in Chapter 3, we developed a suitable Sim- represents the logical “and” to signify that all con-
ulated Annealing algorithm for solving the model for straints must be satisfied to a certain degree (Min). The
 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff 213

Table 3
Solutions of the Zimmermann’s approach and flexible fuzzification model for crashing project problem (α = 0.98)
Variable A B C Variable A B C Variable A B C
Z= 440.01 352.7 351.47
M 0.97 0.982
t12 0.00 0.00 0.54 t1314 2.00 2.01 0.44 t8 90.00 101.16 90.97
t13 1.00 1.13 0.54 t1415 1.00 1.01 0.26 t9 26.50 26.25 28.50
t24 0.00 0.00 0.60 t1416 0.00 0.00 0.57 t10 111.50 111.16 95.90
t28 0.00 0.00 0.09 t1518 2.50 2.53 0.02 t11 111.50 111.13 101.21
t25 0.00 0.00 0.15 t1517 0.00 0.00 0.29 t12 121.50 121.08 130.52
t36 0.00 0.00 0.85 t1618 0.00 0.00 2.61 t13 125.50 125.84 135.84
t39 0.00 0.00 0.00 t1619 0.00 0.00 0.85 t14 143.50 143.74 155.46
t37 5.00 5.01 1.19 t1819 3.00 3.02 1.88 t15 152.50 152.70 166.00
t411 0.00 0.00 0.52 t1 0.00 0.00 0.77 t16 172.50 172.69 165.49
t810 0.00 0.00 0.47 t2 5.00 4.97 5.99 t17 202.50 202.72 216.37
t811 0.00 0.00 0.06 t3 4.00 3.83 5.71 t18 202.50 202.66 219.43
t911 0.00 0.00 0.59 t4 81.50 81.16 15.50 t19 262.00 262.14 263.19
t712 2.50 2.55 0.16 t5 90.00 101.19 76.68
t1112 0.00 0.00 0.87 t6 26.50 26.28 28.29
t1213 1.00 0.21 0.59 t7 61.50 61.27 67.27

Table 4 of Zimmermann, which represents a reduction of about

Min results
Variables Simulated Annealing approach
Maxmin (α > 0.95) Maxmin (α > 0.98)
Z 354.5 351.47
Ax≥B
˜ 0.952 0.982
Ax≥B
˜ 0.951 0.982
Min 0.951 0.982
objective becomes the maximization of minimization
of the constraint deviations.
For the number of neighours to be generated, N(t) we
made a heuristic procedure of generating 300 neigh-
bours, if t < 300, and generating 400 neigbours if
t  300. This procedure assumes that more neighbours
should be generated when the temperature decreases
to have more options to test. The temperature’s func-
tion T (t) uses a decreasing factor of 0.95. The stopping
criterion used is reached when the temperature is less
than 0.0018. For the purpose of solving time-cost trade-
off project problem the SA algorithm was coded in C
programming language.
To prove the applicability of our approach for fuzzy
time-cost trade-off project crashing problem we tested it
for different threshold values. We compared the results
of the crisp version (A), Zimmerman’s approach (B)
and the SA algorithm based on flexible fuzzification
model (C) for the considered project time-cost tradeoff
problem.
After relaxing the objective function and the con-
straints, we obtained the value of 352.7. For the
objective function when using the crisp transformation
87.31 monetary units as costs of project time crash-
ing respect to the crisp case. Values of variables are
very similar to exact case, except a small difference for
variables t1213 and t5 and t8 .
After several tests the threshold of α = 0.98 seems to
provide the best results, as shown in Table 3. Applying
our fuzzy SA approach for the threshold value α = 0.95
for all constraints we obtained a slightly worse result
for the objective function in comparison with Zim-
mermann’s solution, but still well below the defined
goal limit. Comparing decision variable values with
those from fuzzy LP solution, there are differences
in most crashing time constraints, but all these new
values are within the boundaries, so there is no infea-
sibility. Furthermore, we can observe that values for
variables t4 , t5 , t8 , t10 , t11 , and t16 present a reduction
in time, relatively to Zimmermann’s and crisp solu-
tion, while the others have slightly higher values (see
Table 3).
In case of increasing the satisfaction degree for all
constraints to a value of 0.98, the value of objective
function decreases to 351.47 which is a better result
than for the Zimmermann’s case. Decision variables for
this case have values that are very close to those from
the first test.
In summary, we can conclude that the use of Sim-
ulated Annealing for the purpose of solving project
time-cost tradeoff problem in the presence of uncer-
tainty seems quite flexible and adaptable than the
crisp mathematical transformations required in Zim-
mermann method.
214 M. Milenkovic et al. / A Fuzzy Simulated Annealing approach for project time-cost tradeoff
From Table 4 we can see that the fuzzy SA, as a
tool for project time-cost tradeoff problem provides
all the constraint violations and not only the aggre-
gated value. Also, if it is used the implementation
where the thresholds can be defined, the decision maker
can select the degree of violation allowed each for
constraint.
6. Conclusion
Tradeoffs between project duration and total cost
are extensively discussed in the project scheduling lit-
erature because of its practical relevance. Time-cost
optimization may be defined as a process of identify-
ing a set of suitable activities for speeding up and for
deciding by how much as to attain the best possible
savings in both time and cost. Since different combina-
tions of possible durations and costs for the activities
can be associated with a project, the problem is which
of these combinations are the best. Determining the
best set is the goal of time-cost optimization. In real
projects, cost and duration of each activity change as a
result of many uncertainties such as inflation, econom-
ical and social stresses, execution errors of contractor
and natural events. In this paper we presented that the
simulated annealing algorithm is a good solution tech-
nique for solving a fuzzy time-cost tradeoff problems.
SA algorithm is relatively simple and easy to implement
and it does not require any mathematical transforma-
tion of the problem to be solved (as it is the case of
the Zimmerman’s method). The results obtained by SA
are compared with that of Zimmermann’s approach for
solving FLP problems, and we conclude that with our
fuzzy SA approach we obtained better values for project
crashing costs. Therefore, our method solves the time-
cost trade-off problems under an uncertain environment
and proved to be practicable through a real example of
franchising implementation project performed by Ser-
bian Postal Company.
In terms of future research it would be interesting to
extend this study, through a comparison of the results
here obtained with the results for other values for the
algorithm control parameters, namely the initial tem-
perature value and eventually also try to adjust the
temperature according to the nature of specific problem.
Additionally, we can also compare the results obtained
with this partial fuzzified problem with those obtained
with a complete fuzzification, to assess the possible
gains of using our SA approach.
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