Improving Strategic Decision-Making in a Closed-Loop Rail Network with Hybrid Simulation-Optimization Modeling

The availability of rail infrastructure resources is a major driver of rail operations performance.  To evaluate the impact of infrastructure provision, network simulation models can be used to accurately represent train traffic behavior in a wide range of scenarios. However, performing this task can result in a problem of high combinatorial nature as the number of factors and their associated levels increase. This requires more sophisticated techniques such as experimental design formulations or optimization modeling in order to yield satisfactory results. Yet the research in network simulation models for rail systems has hitherto been limited to simple what-if analysis, made up from few factors that cannot represent the whole spectrum of interventions. This is especially critical in closed-loop rail systems where trains are subject to various interferences. Local improvements can be misleading as the queues are merely transferred within the network. Considering this, we propose a hybrid simulation-optimization model to aid the strategic decision of minimizing supplementary capital costs in a heavy-haul Brazilian railroad under construction. As soon as the railroad is completed, investments in both loading and unloading rail terminals will be necessary. First, we developed a representative and flexible model capable of dealing with complex relations between variable infrastructure provision and the resulting operational performance. Then, we simulated this system to prove that the current set of proposed infrastructure resources cannot meet the transportation demands. Afterwards, we demonstrate that local improvements can be delusive as the queues are shifted from loading to unloading operations, reciprocally. Then, we solve an optimization model to define the minimal supplementary investment in order to meet the commercial goals of mining companies. This is done by choosing the best trackage configuration, equipment quantity and capacity and fleet sizing in 3 different production scenarios. The best values of the objective function were found by improving both loading and unloading equipment and increasing the number of trains.