Proposal and Solution of a Mixed-Integer Nonlinear Optimization Model That Incorporates Future Preparedness for Project Portfolio Selection

In the context of project management, the attention given to project portfolio management has increased in recent years. The use of mathematical programming for portfolio management is also on the rise, because it integrates the project interactions with the multiple objectives of portfolio management into a single model. Among the possible objectives, recent studies have paid special attention to the emerging objective of future preparedness, which has not yet been incorporated into the existing mathematical models. This paper presents a mixed-integer nonlinear optimization model for portfolio selection that considers four main performance measures for project management, namely, value maximization, strategic alignment, balance, and future preparedness. Given the importance of the last measure, the purpose of this paper is to provide a more complete model that provides the marginal contribution and the best combination of projects according to the needs of the company. The model is tested using real data from two companies, one in Brazil and one in Canada, and the results obtained are coherent with their respective practices.