This study derives optimal hedging rules for simultaneously minimizing short- and long-term shortage characteristics for a water-supply reservoir. Hedging is an effective measure to reduce a high-percentage single period shortage, but at a cost of more frequent small shortages. Thus simultaneously minimizing the maximum monthly shortage and the shortage ratio (defined as the ratio of total shortages to total demands) over the analysis horizon is the operation goal of a water-supply reservoir to derive optimal hedging rules. Two types of hedging are explored in this study: the first uses water availability defined as storage plus inflow, while the second depends on the potential shortage conditions within a specific future lead-time period. The compromise programming is employed to solve this conflicting multiobjective problem. The optimal hedging rules under given reservoir inflow are derived first. Because future inflow cannot be known exactly in advance, the monthly decile inflows are suggested as a surrogate for forecast of future inflows in hedging rules for real-time reservoir operations. The results show that the suggested method can effectively achieve the reservoir operation goal. The merits of the proposed methodology are demonstrated with an application to the Shihmen reservoir in Taiwan.
