A stochastic programming model for a tactical solid waste management problem

Solid waste management poses a rich variety of interesting and challenging optimization problems. Waste managers are required to take short-, medium-, and long-term planning decisions, while taking into account the articulated multi-echelon supply chain of waste generation, treatment and disposal. In all such situations, neglecting the uncertainty of the waste generation rates can lead to unreliable decision plans.
In this paper, we address a tactical problem of waste flow allocation from a waste operator point of view with the aim of minimizing the total management cost, net of possible profits obtained by special subproducts. We propose a two-stage multi-period stochastic programming formulation. The first-stage decisions take into account the facility activation and a pre-allocation of waste flow, while the recourse action considers the excess waste. We then benchmark the formulation by solving an instance derived from historical data provided by a large Italian waste treatment company. Scenario trees are generated from predictive models of unsorted waste. Finally, the impact of the stochastic waste generation on the problem solution is examined, showing the benefit of the stochastic methodology when compared with the deterministic formulation.