Optimizing infrastructure network maintenance when benefits are interdependent

Network Topology Dependencies (NTD) are a class of externalities in the maintenance cost structure of infrastructure networks with applications to many network industries, including natural gas and water distribution pipelines. It is shown that the above externalities may be included to infrastructure maintenance decisions, if optimal maintenance is formulated as a Rhys-Balinski selection problem. A unique contribution is that this risk management problem is analyzed from the point of view of integrating quantitative analysis to organizational and inter-organizational decision processes. Hence, the importance of various procedural requirements is established in addition to computational efficiency and numerical accuracy. In particular, the benefits of sensitivity analysis facilitation and of avoiding manipulability are stressed. The proposed solution process achieves all four requirements. Special attention is paid to the role of submodularity and antitone differences in sensitivity analysis.