Application of stochastic optimization to nuclear power plant asset management decisions

David Morton, Ali Koç, Stephen M. Hess

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

We describe the development and application of stochastic optimization models and algorithms to address an issue of critical importance in the strategic allocation of resources; namely, the selection of a portfolio of capital investment projects under the constraints of a limited and uncertain budget. This issue is significant and one that faces decision-makers across all industries. The objective of this strategic decision process is generally self evident - to maximize the value obtained from the portfolio of selected projects (with value usually measured in terms of the portfolio's net present value). However, heretofore, many organizations have developed processes to make these investment decisions using simplistic rule-based rank-ordering schemes. This approach has the significant limitation of not accounting for the (often large) uncertainties in the costs or economic benefits associated with the candidate projects or in the uncertainties in the actual funds available to be expended over the projected period of time. As a result, the simple heuristic approaches that typically are employed in industrial practice generate outcomes that are non-optimal and do not achieve the level of benefits intended. In this paper we describe the results of research performed to utilize stochastic optimization models and algorithms to address this limitation by explicitly incorporating the evaluation of uncertainties in the analysis and decisionmaking process.

Original languageEnglish (US)
Title of host publicationInternational Conference on Mathematics and Computational Methods Applied to Nuclear Science and Engineering, M and C 2013
Pages292-303
Number of pages12
Volume1
StatePublished - Sep 9 2013
EventInternational Conference on Mathematics and Computational Methods Applied to Nuclear Science and Engineering, M and C 2013 - Sun Valley, ID, United States
Duration: May 5 2013May 9 2013

Other

OtherInternational Conference on Mathematics and Computational Methods Applied to Nuclear Science and Engineering, M and C 2013
CountryUnited States
CitySun Valley, ID
Period5/5/135/9/13

Keywords

  • Asset management
  • Integer programming
  • Stochastic optimization

ASJC Scopus subject areas

  • Nuclear Energy and Engineering
  • Applied Mathematics

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  • Cite this

    Morton, D., Koç, A., & Hess, S. M. (2013). Application of stochastic optimization to nuclear power plant asset management decisions. In International Conference on Mathematics and Computational Methods Applied to Nuclear Science and Engineering, M and C 2013 (Vol. 1, pp. 292-303)