NPV-based decision support in multi-objective design using evolutionary algorithms

Optimum design problems are frequently formulated using a single excellence criterion (minimum mass or similar) with evolutionary algorithms engaged as decision-support tools. Alternatively, multi-objective formulations are used with a posteriori decision-making amongst the Pareto candidate solutions. The former typically introduces excessive simplification in the decision space and subjectivity, the latter leads to extensive numerical effort and postpones the compromise decision-making. In both cases, engineering excellence metrics such as minimum mass can be misleading in terms of performance of the respective design in the given operational environment. This paper presents an alternative approach to conceptual design where a compound objective function based on the Net Present Value (NPV) and Internal Rate of Return (IRR) aggregate performance metrics is developed. This formulation models the integral value delivered by the candidate designs over their respective life-cycles by applying value-based NPV discounting to all objectives. It can be incorporated as an a priori compromise and consequently viewed as a weighted sum of individual objectives corresponding to their economically faithful representation over the entire operational life-time of the designs. The multi-objective design optimization is consequently expanded from purely engineering terms to coupled engineering–financial decision support.