Decision Sciences Journal
Volume 30, Number 2
Spring 1999
Optimizing Natural Gas Flows with Linear Programming and
Scenarios
John C. Butler
Department of Accounting and MIS, 2100 Neil Avenue, 400 Fisher
Hall, The Ohio State University, Columbus, OH 43210, butlerj@cob.ohio-state.edu
James S. Dyer
Management Science and Information Systems Department, CBA 5.202
(B6500), The Graduate School of Business, University of Texas
at Austin, Austin, TX 78712, j.dyer@mail.utexas.edu
ABSTRACT
Recently, we developed a linear programming model to aid an electric
utility company in evaluating several long-term operating decisions.
Variations of this model provide insights into daily operations
and valuation of supply contracts. This paper outlines the important
characteristics of this class of network models including the
usage of a gas storage facility, the use of market forecasts
of gas prices, and the accommodation of gas contract structures.
In addition, we develop a scenario optimization procedure in
which demand forecasts provide scenarios. We also describe ways
in which these models were automated to drive a decision support
system.
Subject Areas: Linear Programming, Inventory Management,
and Utility Applications of Operations Research. |