Date of Original Version

5-22-2013

Type

Article

Abstract or Description

We describe a hybrid bi-level decomposition scheme that addresses the challenge of solving a large-scale two-stage stochastic programming problem with mixed-integer recourse, which results from a multi-scale capacity planning problem as described in part I of this paper series. The decomposition scheme combines bi-level decomposition with Ben- ders decomposition, and relies on additional strengthening cuts from a Lagrangean-type relaxation and subset-type cuts from structure in the linking constraints between investment and operational variables. The application of the scheme with a parallel implementation to an industrial case study reduces the computational time by two orders of magnitude when compared with the time required for the solution of the full-space model.

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