Management of irrigation water storages: carryover rights and capacity sharing

The intertemporal management of irrigation water involves a consumption-storage decision, where the benefits of using water today are evaluated against the uncertain benefits of storing water for future use. Traditionally in Australia, state governments have centrally managed the major water storages: making decisions on water allocations given prevailing storage levels. However, in practice there are a number of factors which may prevent a centralised approach from achieving an optimal allocation of water. This paper considers in detail two decentralised approaches to storage management: carryover rights and capacity sharing. This paper also presents a quantitative analysis of storage management, involving the application of a stochastic dynamic programming model.

Robust optimization for energy transactions in multi-microgrids under uncertainty

Independent operation of single microgrids (MGs) faces problems such as low self-consumption of local renewable energy, high operation cost and frequent power exchange with the grid. Interconnecting multiple MGs as a multi-microgrid (MMG) is an effective way to improve operational and economic performance. However, ensuring the optimal collaborative operation of a MMG is a challenging problem, especially under disturbances of intermittent renewable energy. In this paper, the economic and collaborative operation of MMGs is formulated as a unit commitment problem to describe the discrete characteristics of energy transaction combinations among MGs. A two-stage adaptive robust optimization based collaborative operation approach for a residential MMG is constructed to derive the scheduling scheme which minimizes the MMG operating cost under the worst realization of uncertain PV output. Transformed by its KKT optimality conditions, the reformulated model is efficiently solved by a column-and-constraint generation (C&CG) method. Case studies verify the effectiveness of the proposed model and evaluate the benefits of energy transactions in MMGs. The results show that the developed MMG operation approach is able to minimize the daily MMG operating cost while mitigating the disturbances of uncertainty in renewable energy sources. Compared to the non-interactive model, the proposed model can not only reduce the MMG operating cost but also mitigate the frequent energy interaction between the MMG and the grid

Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

COOPERATION SUPPORT IN A DYADIC SUPPLY CHAIN

To improve the supply chains performance, taking into account the customer demand in the tactical planning process is essential. It is more and more difficult for the customers to insure a certain level of demand over a medium term period. Then it is necessary to develop methods and decision support systems to reconcile the order and book processes. In this context, this paper aims at introducing a collaboration support tool and methodology dedicated to a dyadic supply chain. This approach aims at evaluating in term of risks different demand management strategies within the supply chain using a simulation dedicated tool. The evaluation process is based on an exploitation of decision theory and game theory concepts and methods.supply chain ; simulation ; collaboration ; decision theory ; risk

Scenarios for the development of smart grids in the UK: synthesis report

‘Smart grid’ is a catch-all term for the smart options that could transform the ways society produces, delivers and consumes energy, and potentially the way we conceive of these services. Delivering energy more intelligently will be fundamental to decarbonising the UK electricity system at least possible cost, while maintaining security and reliability of supply. Smarter energy delivery is expected to allow the integration of more low carbon technologies and to be much more cost effective than traditional methods, as well as contributing to economic growth by opening up new business and innovation opportunities. Innovating new options for energy system management could lead to cost savings of up to £10bn, even if low carbon technologies do not emerge. This saving will be much higher if UK renewable energy targets are achieved. Building on extensive expert feedback and input, this report describes four smart grid scenarios which consider how the UK’s electricity system might develop to 2050. The scenarios outline how political decisions, as well as those made in regulation, finance, technology, consumer and social behaviour, market design or response, might affect the decisions of other actors and limit or allow the availability of future options. The project aims to explore the degree of uncertainty around the current direction of the electricity system and the complex interactions of a whole host of factors that may lead to any one of a wide range of outcomes. Our addition to this discussion will help decision makers to understand the implications of possible actions and better plan for the future, whilst recognising that it may take any one of a number of forms

An Energy Sharing Game with Generalized Demand Bidding: Model and Properties

This paper proposes a novel energy sharing mechanism for prosumers who can produce and consume. Different from most existing works, the role of individual prosumer as a seller or buyer in our model is endogenously determined. Several desirable properties of the proposed mechanism are proved based on a generalized game-theoretic model. We show that the Nash equilibrium exists and is the unique solution of an equivalent convex optimization problem. The sharing price at the Nash equilibrium equals to the average marginal disutility of all prosumers. We also prove that every prosumer has the incentive to participate in the sharing market, and prosumers' total cost decreases with increasing absolute value of price sensitivity. Furthermore, the Nash equilibrium approaches the social optimal as the number of prosumers grows, and competition can improve social welfare.Comment: 16 pages, 7 figure

Modeling Overstock

Two main problems have been emerging in supply chain management: the increasing pressure to reduce working capital and the growing variety of products. Most of the popular indicators have been developed based on a controlled environment. A new indicator is now proposed, based on the uncertainty of the demand, the flexibility of the supply chains, the evolution of the products lifecycle and the fulfillment of a required service level. The model to support the indicator will be developed within the real options approach.overstock, stock management, real options