Developing flexible management strategies in infrastructure: The sequential expansion problem for infrastructure analysis (SEPIA)

Infrastructure systems are usually designed to operate over long time periods. This leads to complex decisions in which the incorporation of risk management strategies is crucial to guarantee a successful operation. Traditional engineering practices focus on finding a fixed set of parameters that fulfill operational objectives throughout the project. This approach is mostly prescriptive and therefore cannot adapt to unexpected changes of external conditions. This work considers an infrastructure network designed to attend a stochastic demand expected to increase over time. The paper presents a model that is capable of integrating different aspects of the decision-making process in a cost-effective manner and incorporates the idea of flexibility. The proposed approach is referred to as Sequential Expansion Problem for Infrastructure Analysis (SEPIA). This approach is based on real performance data acquisition, optimization of decisions given possible future scenarios, and a scheduling strategy that allows operating interconnected components in an infrastructure network. The paper also presents a computational implementation that can effectively find solutions for large decision spaces. Through two examples, it is shown that incorporating flexibility in the decision strategies allows simulating more realistic decision scenarios, as well as improving the long-term performance of the system compared to traditional approaches.