Water Supply Operations During Drought

During years when water supply may not be adequate to cover water demands, water supply decision maker or managers need to decide how to spread projected shortages through the anticipated drought. Such decisions will affect the total economic damages caused by shortages as well as the duration of the drought. If a loss or damage function is a convex function in shortage quantity then hedging is necessary. Where by hedging is meant early reductions to avoid the potential of later larger reductions in supply. In this paper, we developed two hedging rules for a water supply reservoir during an anticipated drought situation. These rules utilize a value of storage plus projected inflow as the mechanism which indicates the extent of rationing required. These operations rule are illustrated using data from the Gunpowder river.