Groundwater quality management under uncertainty: stochastic programming approaches and the value of information

A stochastic optimization model for containment of a plume of groundwater contamination through the installation and operation of pumping wells is developed. It considers explicitly uncertainty about hydraulic conductivity in the aquifer and seeks to minimize the expected total cost of operating the pumping wells plus the recourse cost incurred when containment of the contaminant plume is not achieved. Four different formulations of the model are examined, ranging from simply replacing all uncertain parameters by their expected values to a full stochastic programming with recourse model involving nonsymmetric linear quadratic penalty functions. The full stochastic programming with recourse model, which minimizes the expected total costs over a number of realizations of outcomes of the random parameters, is nonlinear and possibly nonconvex and is solved by an extension of the finite generation algorithm. The value of information about the uncertain parameters is defined through the differences between the values of the optimal solutions to the different formulations. A sample problem is solved using all four formulations. The results indicate that the explicit incorporation of uncertainty does make a difference in the solutions obtained. The work indicates that stochastic programming with recourse is a useful tool in management under uncertainty, and that it can be used with reasonable computational resources for problems of moderate size.