Inventory Theory-Based Stochastic Optimization for Reservoir Water Allocation

This study aims to develop an effective model for reservoir water allocation under conditions of uncertainty. To identify a practical method that increases the benefits by optimizing the water allocation policies while reducing the costs by optimizing the water transfer scheme, several stochastic programming models (EOQ-TSP models) were developed by integrating economic order quantity (EOQ) models into a two-stage stochastic programming (TSP) framework. The EOQ-TSP models are advantageous for analyzing the effects of the water inventory scheme on the reservoir water allocation benefits and better at optimizing water allocation policies while also considering uncertainties regarding different flow levels and different water inventory conditions in a water supply-inventory-demand system. Finally, the feasibility of the developed EOQ-TSP models was demonstrated by applying the models to a real-world case study. The results show that the benefits of the optimal water allocation policy will be further increased by optimizing the water transfer scheme, and these proposed models will be helpful for systematizing reservoir water management and identifying optimal reservoir water allocation plans in uncertain environments.