MODELING AND SENSITIVITY ANALYSIS FOR PLANNING DECISIONS IN WATER RESOURCES EXPANSION1

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Abstract
Individuals and organizations concerned with the expansion of the facilities of a river basin (such as a river basin authority) need to determine optimal strategies of operation and capital investment. They also need to examine the sensitivity of whatever planning decisions are contemplated. This paper extends the applicability of an algorithm that had been previously applied to the deterministic river‐basin expansion problem to include the feature of a sensitivity analysis. The algorithm, containing a partial enumeration search technique and a network analysis code, gave a construction sequence of reservoirs, canals, and treatment plants, and an operating policy that maximized the present value of net earnings consistent with certain underlying assumptions. A river basin was chosen that had an existing configuration of unregulated streams and rivers, reservoirs, canals and treatment plants, and sites for future additional facilities.A series of representative synthetic flow sequences, future demand profiles, interest rates and reservoir costs that served as inputs to or parameters in the system were each perturbed by various factors (for a total of 24 cases). The sensitivity studies showed that the immediate planning decision of what facility to construct next was insensitive to variations in future demands and costs and independent of later decisions. Thus, decision‐making was adaptive in the sense that by always making the optimal proximate decision, the management of the river basin is optimized.

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