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We consider a risk-averse stochastic capacity planning problem under uncertain demand in each period. Using a scenario tree representation of the uncertainty, we formulate a multistage stochastic integer program to adjust the capacity expansion plan dynamically as more information on the uncertainty is revealed. Specifically, in each stage, a decision maker optimizes capacity acquisition and resource allocation to minimize certain risk measures of maintenance and operational cost. We compare it with a two-stage approach that determines the capacity acquisition for all the periods up front. Using expected conditional risk measures, we derive a tight lower bound and an upper bound for the gaps between the optimal objective values of risk-averse multistage models and their two-stage counterparts. Based on these derived bounds, we present general guidelines on when to solve risk-averse two-stage or multistage models. Furthermore, we propose approximation algorithms to solve the two models more efficiently, which are asymptotically optimal under an expanding market assumption. We conduct numerical studies using randomly generated and real-world instances with diverse sizes, to demonstrate the tightness of the analytical bounds and efficacy of the approximation algorithms. We find that the gaps between risk-averse multistage and two-stage models increase as the variability of the uncertain parameters increases and decrease as the decision maker becomes more risk averse. Moreover, a stagewise-dependent scenario tree attains much higher gaps than a stagewise-independent counterpart, whereas the latter produces tighter analytical bounds. History: Accepted by Andrea Lodi, Area Editor for Design & Analysis of Algorithms–Discrete. Funding: This work of Dr. X. Yu was partially supported by the U.S. National Science Foundation Division of Information and Intelligent Systems [Grant 2331782]. Supplemental Material: The software that supports the findings of this study is available within the paper and its Supplemental Information ( https://pubsonline.informs.org/doi/suppl/10.1287/ijoc.2023.0396 ) as well as from the IJOC GitHub software repository ( https://github.com/INFORMSJoC/2023.0396 ). The complete IJOC Software and Data Repository is available at https://informsjoc.github.io/ . 

The outbreak of coronavirus disease 2019 (COVID-19) has led to significant challenges for schools and communities during the pandemic, requiring policy makers to ensure both safety and operational feasibility. In this paper, we develop mixed-integer programming models and simulation tools to redesign routes and bus schedules for operating a real university campus bus system during the COVID-19 pandemic. We propose a hub-and-spoke design and utilize real data of student activities to identify hub locations and bus stops to be used in the new routes. To reduce disease transmission via expiratory aerosol, we design new bus routes that are shorter than 15 minutes to travel and operate using at most 50% seat capacity and the same number of buses before the pandemic. We sample a variety of scenarios that cover variations of peak demand, social distancing requirements, and bus breakdowns to demonstrate the system resiliency of the new routes and schedules via simulation. The new bus routes were implemented and used during the academic year 2020–2021 to ensure social distancing and short travel time. Our approach can be generalized to redesign public transit systems with a social distancing requirement to reduce passengers’ infection risk. History: This paper was refereed. This article has been selected for inclusion in the Special Issue on Analytics Remedies to COVID-19. Funding: This work was supported by the National Science Foundation [Grant CMMI-2041745] and the University of Michigan, College of Engineering. 

In this paper, we consider an integrated vehicle routing and service scheduling problem for serving customers in distributed locations who need pick-up, drop-off, or delivery services. We take into account the random trip time, nonnegligible service time, and possible customer cancellations, under which an ill-designed schedule may lead to undesirable vehicle idleness and customer waiting. We build a stochastic mixed-integer program to minimize the operational cost plus expected penalty cost of customers’ waiting time, vehicles’ idleness, and overtime. Furthermore, to handle real-time arrived service requests, we develop K-means clustering-based algorithms to dynamically update planned routes and schedules. The algorithms assign customers to vehicles based on similarities and then plan schedules on each vehicle separately. We conduct numerical experiments based on diverse instances generated from census data and data from the Ford Motor Company’s GoRide service, to evaluate result sensitivity and to compare the in-sample and out-of-sample performance of different approaches. Managerial insights are provided using numerical results based on different parameter choices and uncertainty settings.