INFORMS JOURNAL ON COMPUTING, vol.27, no.4, pp.755-772, 2015 (SCI-Expanded)
We propose a multistage stochastic mixed-integer programming formulation for the assignment of surgeries to operating rooms over a finite planning horizon. We consider the demand for and the duration of surgery to be random variables. The objective is to minimize three competing criteria: expected cost of surgery cancellations, patient waiting time, and operating room overtime. We discuss properties of the model and an implementation of the progressive hedging algorithm to find near-optimal surgery schedules. We conduct numerical experiments using data from a large hospital to identify managerial insights related to surgery planning and the avoidance of surgery cancellations. We compare the progressive hedging algorithm to an easy-to-implement heuristic for practical problem instances to estimate the value of the stochastic solution. Finally, we discuss an implementation of the progressive hedging algorithm within a rolling horizon framework for extended planning periods.