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The Optimal Investment Portfolio for Land Development Projects of Public Company

  • Korea Real Estate Review
  • 2016, 26(3), pp.23-38
  • Publisher : korea real estate research institute
  • Research Area : Social Science > Law > Law of Special Parts > Law of Real Estate
  • Published : September 30, 2016

박재호 1 Geem, Zong Woo 2 Yu, Jung Suk 1

1단국대학교
2가천대학교

Accredited

ABSTRACT

We propose two methods such as Genetic Algorithm (GA) and Branch & Bound method (B&B) for deriving the optimal investment combination (combinatorial optimization) from among the various real estate development projects and public company may adopt these methods to maximize the return of investment while meeting the multiple constraints. With these methods, public company could have a reasonable investment portfolio that maximizes the return of investment while meeting the multiple constraints such as limited investment for financial soundness, balanced regional development, balanced project investment, project prepared for lay-off, etc. However, in the conventional social sciences, it is rare to solve these problems using the optimization model. Therefore, we set up an optimization model and derive an optimal investment combination using Genetic Algorithm (GA) and Branch & Bound method (B&B). Through virtual example, we were able to convince that these methodologies can be used conveniently in the field of various social sciences as well as real estate studies in case the variables are discrete and constraints have discontinuous attributes.

Citation status

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