Value of information analysis in non-stationary stochastic decision environments: A reliability-assisted POMDP approach

Chaolin Song, Chi Zhang, Abdollah Shafieezadeh and Rucheng Xiao

Reliability Engineering and System Safety, 2022, vol. 217, issue C

Abstract: Optimal management of systems over their service life as they face a multitude of uncertainties remains a significant challenge. While additional information can reduce uncertainties, collecting new information incurs cost and may include observation error. Value of Information (VoI) analysis facilitates quantitative assessment of the expected net benefits of collecting new information. Moreover, partially observable Markov decision processes (POMDPs) can be integrated within VoI analysis to efficiently capture the sequential decision-making environments for systems. The assumption of stationary environment in existing POMDP frameworks for VoI analysis may not be valid, however, in many applications such as deterioration processes which are often non-stationary. To address this gap, this paper presents a new approach called VoI-R-POMDP. A new POMDP framework is proposed to accurately describe non-stationary processes using multiple integrated transition models. New strategies based on reliability concepts are developed to accurately and efficiently determine the parameters of the proposed POMDP model based on prior information. A new formulation of the observation function based on Bayes’ theorem is also derived. The proposed framework is applied to a corroding beam example. Results indicate that VoI-R-POMDP can accurately and efficiently describe the deterioration process and thus provide accurate VoI estimates for non-stationary systems.

Keywords: Value of information; Reliability methods; Partially observable Markov decision processes; Bayes’ theorem; Non-stationary environments (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reensy:v:217:y:2022:i:c:s095183202100541x

DOI: 10.1016/j.ress.2021.108034

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