A Stochastic Multi-Period Investment Selection Model to Optimize Strategic Railway Capacity Planning

This article describes a Stochastic Multi-period Investment Selection Model (S-MISM) that can be used to assist railroads to allocate their capital investments in a long-term strategic capacity planning process. The authors note that the decision horizon of strategic planning usually ranges from 10 to 20 years, so it becomes crucial to determine optimal sequences for capacity expansion projects that take into consideration both periodic budget constraints and uncertainty in future demand. Their optimization framework uses stochastic programming and Benders decomposition and can determine which portions of a rail network need to be upgraded with what kind of expansion options at each defined period in the planning horizon. The authors present experimental results to show that the inclusion of demand uncertainty results in a better and more robust capacity plan. They conclude that, by using this decision support tool, railroads can maximize their return from capacity expansion projects and minimize the risk in strategic capacity planning subject to demand uncertainty. This is particularly important at this time with railroads are approaching the limits of practical capacity.

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  • English

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  • Accession Number: 01492187
  • Record Type: Publication
  • Files: TRIS
  • Created Date: May 8 2013 3:21PM