Optimal sequencing for a multipurpose water supply system

The optimal sequencing of a multipurpose water supply system in the Hajduhátság region of Hungary is determined by dynamic programming. The goal function minimizes the present value of capital costs, operation costs, and economic losses due to water shortages. Future water requirements are considered to be random variables because of natural and forecasting uncertainties. The nonlinear optimization problem at each stage is equivalent to a readily solved game theoretical problem, the solution of which is straightforward. Sensitivity analysis performed with respect to economic losses, water requirements and discount rate, showed that optimal development and sequencing depend largely on the economic losses and the discount rate.