Optimum selection of multibenefit civil works projects

The U.S. Army Corps of Engineers is annually faced with the problem of determining which of several proposed civil works projects to fund. Each project has a specified cost. Furthermore, each project can contribute benefits in a number of different categories; for example, a water reservoir project may contribute benefits in the categories of flood control, power generation, river navigation, general recreation, conservation of fish and wildlife, water quality control, municipal and industrial water supply, irrigation, and other categories. Previous work by the Corps of Engineers has resulted in the development of methods for quantifying the benefit produced in a specific category by a particular project. However, because each project produces a multiplicity of benefits of a variety of types, a straightforward project selection procedure based on benefit cost ratios has obvious shortcomings. Many benefits have natural physical units of measure, but are difficult to measure in dollars. Even if all benefits could be assessed in dollars, they often accrue to different population segments and are hence qualitatively different. An uncritical summation even in this case may result in a loss of information relevant to the decision maker(s). Finally, a yes or no decision on a particular project should be made in the context of other projects with similar benefits which are competing for a part of the same limited supply of capital resources. Thus the desirability of a given project is dependent upon decisions made with respect to other related projects. Explicit consideration should therefore be given to sets of projects acting in concert. The purpose of this paper is to describe a computer program developed by the authors for use by Corps of Engineers planners as an aid in the project selection process. This program is based on a formulation of the multibenefit project selection problem as an integer programming problem. A specialized integer programming code developed by- the first author is used to obtain specific solutions. The program can consider as many as 125 projects, each of which can produce benefits in any of 50 benefit categories. Computation times for typical problems are on the order of one minute for a UNIVAC 1108. The paper first summarizes the basic problem formulation. The integer programming algorithm for solving the program is then described. Finally, a summary of computational experience is prescribed.