An efficient hierarchical market-like coordination algorithm for coupled production systems based on quadratic approximation

In an increasingly digitized, integrated, and connected production environment, the coordination of complex coupled systems of systems is essential to ensure a resource efficient and optimal operation. Large production sites or industrial clusters are such systems, where the coordination is challenging. One of the challenges is the physical coupling of the individual production plants via networks of shared resources such as steam, intermediates, wastewater or heating gas. If only a restricted amount of business relevant data can be exchanged within the system, distributed market-like coordination methods can be used to establish an auction in a micro market to optimally balance the shared resource networks. The drawback of these methods is their slow rate of convergence. Thus, we propose an efficient hierarchical market-like coordination algorithm that approximates the responses of the subsystems to find the optimal solution within fewer iterations. We demonstrate the efficiency of approach for two numerical case studies. (C) 2019 The Authors. Published by Elsevier Ltd.