STOCHASTIC ALLOCATION OF A RESOURCE AMONG PARTIALLY INTERCHANGEABLE ACTIVITIES

This paper examines the problem of allocating an available amount of a particular resource among partially interchangeable activities, when the demands for the activities are strongly correlated continuous rand om variables. The problem is formulated as a stochastic program with c omplete recourse and it is reduced to a deterministic convex allocatio n problem through parametric programming. A general solution procedure is proposed. An important application of the problem studied deals wi th the allocation of the budget of a nursing unit in a hospital to reg istered nurses, licenced practical nurses and aides. The case of three activities is therefore studied in detail to obtain a solution algori thm as efficient as possible.