Simulation modeling using markovian decision theory in co-managing the competitive anambra and imo river basin

Abstract

This work for purposes of efficiency aims at funding Anambra and Imo River Basin Development Authorities (RBDAS), namely RBDA I and RBDA 2, according to their net returns achieved on investment, since they operate within the same region of influence and are managed by a single board of directors. The RBDAS are competitively embarking on irrigated agriculture, water supply, hydroelectric power generation, flood control, drainage, navigation, recreation/tourism and erosion control. There is an expansion fund of N 782.76 billion for full capacity utilization of the basin’s assets involving 25 rivers in the South East Geopolitical region. The problem facing each of the RBDA is their strategy or optimal policy to maximize its net return per unit of investment on each of the developmental projects. On the other hand, the problem facing the management board is the ratio in which to share the funds available for expansion as to allow each of the RBDA to perform at an optimum level. Methodology involves methods and experiments. Data were collected from ABDAS, Ministries and Parastatal. When RBDA1 and RBDA 2 invest under the most unfavorable competition, it can assure itself of a net return ratio of 460/1000 respectively. Consequently, the management board will share the new fund (N 782.76 billion) available for expansion so as to allow each RBDA to perform at an optimum level according to the said ratio, which is the value of the Markovian Decision rule to ensure optimum efficiency. That is RBDA 1 gets N 246.62 billion and RBDA 2 gets N 536.14 billion.