Study on project payment scheduling problems with bonus-penalty structure from two viewpoints

The project payment scheduling problem with bonus-penalty structure is defined and its assumptions are identified firstly. Then the basic mathematic models of the problems are constructed from contractor's and client's viewpoints respectively and extended to the cases of time-based payment and cost-based payment. In addition, the influences of bonus-penalty structure on NPV of contractors and clients and how to evaluate bonus-penalty structure are discussed. And a special simulated annealing heuristics with two modules is developed as well. Ultimately, the outcomes of the paper are illustrated through an instance.