OPTIMAL CAPACITY EXPANSION UNDER UNCERTAINTY

CAPACITY EXPANSION REFERS TO THE PROCESS OF ADDING FACILITIES TO MEET A RISING DEMAND FOR SERVICES OR PRODUCTS. THE GOAL OF THE PROPOSED RESEARCH IS TO DEVELOP APRECISE MATHEMATICAL MODEL (BASED ON A PIECEWISE-DETERMINISTIC MARKOV PROCESS) FOR THE UNCERTAINTIES IN CAPACITY EXPANSION PLANNING AND TO STUDY THE CONSTRUCTION OF OPTIMAL PLANS WITH THIS FRAMEWORK BY MEANS OF STOCHASTIC CONTROL THEORY. TO PROVIDE A CONCRETE CONTEXT FOR OUR PHASE I WORK, WE PLAN TO DIRECT OUR RESEARCHTOWARD THE SPECIFIC CAPACITY EXPANSION PLANS FACED BY ELECTRIC UTILITIES. WE PROPOSE TO ACHIEVE OUR RESEARCH GOAL BY: FORMULATING A REPRESENTATIVE CLASS OF CAPACITY EXPANSION PROBLEMS USING DEMAND AND COMPLETION TIME DATA FROM ELECTRICUTILITIES. DETERMINING OPTIMAL CONTROLS OR INVESTMENT STRATEGIES FOR THESE PROBLEMS USING ANALYTIC AND NUMERICAL TECHNIQUES. IMPLEMENTING THESE OPTIMIZATION TECHNIQUES ON A COMPUTER ANDGENERATING A SET OF CLEAR, ILLUSTRATIVE EXAMPLES OF THEIR EFFECTIVENESS. SUCCESSFUL COMPLETION OF THESE OBJECTIVES WILL DEMONSTRATE THE FEASIBILITY OF EXTENDING OUR APPROACH TO A PROTOTYPE CAPACITY EXPANSION DECISION AID DURING PHASE II.