Allocation and pricing of drinking water in a sustainable closed-loop supply chain under uncertainty Academic Article in Scopus uri icon

abstract

  • Drinking water availability faces mounting challenges from climate change and population growth, making effective allocation increasingly complex, especially when considering sewage collection and pricing. This paper presents an innovative solution through integrated optimization and discrete simulation models designed to address water and wastewater pricing and allocation within a closed-loop supply chain. The comprehensive modeling framework incorporates multiple critical elements: diverse water sources, zone-specific demands, multi-period evaluation, sewage collection, water reuse, and different tariff structures. It also accounts for uncertainty in key parameters. The methodology begins with a linear programming model that optimizes allocation and distribution by mapping water flow through sources, purification centers, and population zones, alongside sewage flow through treatment facilities. The resulting allocation plan achieves cost minimization while maintaining essential water source thresholds and meeting demand within system constraints. Building on this allocation framework, it is developed precise mathematical expressions for four distinct water tariff structures: fixed charge, uniform volumetric tariff, increasing block tariff, and decreasing block tariff. While acknowledging that each population zone presents unique socioeconomic and environmental characteristics that influence tariff suitability, this work provides a robust mathematical and theoretical foundation for tariff construction. The final component of the methodology employs a multi-objective integer programming model to evaluate and select optimal tariff structures. This model incorporates key sustainability indicators, including price and subsidy per unit volume, as well as unconsumed water volume resulting from economic constraints. Through this comprehensive approach, it is delivered a sophisticated methodology for balancing the economic, social, and environmental dimensions of sustainable water management. © 2025 Elsevier Ltd

publication date

  • August 25, 2025