Vol. 34, No. 3, May–June 2004, pp. 208–214 issn 0092-2102  eissn 1526-551X  04  3403  0208 inf orms ® doi 10.1287/inte.1030.0069 © 2004 INFORMS Schlumberger Optimizes Receiver Location for Automated Meter Reading Srinagesh Gavirneni Operations and Decision Technologies, Kelley School of Business, Indiana University, Bloomington, Indiana 47405, sgavirne@indiana.edu Lloyd Clark Austin Technology Center, Schlumberger, Austin, Texas 78726, ldclark@sugar-land.oilfield.slb.com Gábor Pataki Department of Operations Research, University of North Carolina, Chapel Hill, North Carolina 27599, pataki@email.unc.edu In its efforts to provide automated meter-reading services to the utility industry, Schlumberger faces the problem of deploying receivers efficiently. In a geographic region, the problem is to install the minimum number of receivers on existing utility poles so that all wireless meters in that region can transmit their readings to at least one. Schlumberger first encountered this large-scale problem in a project it ran for Illinois Power. It found solving this problem manually very time consuming, and it had no ability to evaluate the robustness of the resulting solution. We proposed and implemented an optimization-based approach that reduced the duration and cost of implementations. In addition, we gave planners the ability to answer what-if questions. Keywords : programming: integer; industries: electric. History : This paper was refereed. S chlumberger provides technology services, such as oil-field services, resource management, transactions-based technology and associated systems, and semiconductor test equipment. It has offices in over 100 countries, employs more than 50000 people, and had revenues of $8.75 billion in 1999. Schlumberger’s resource-management services (RMS) division is a leading provider of electricity, gas, and water meters with more than 200 million units installed around the world. In 1999, RMS had revenues of $1.38 billion, employed over 15000 people, and had sales offices and factories in more than 35 countries. In the late 1990s, it started offering professional business services for the utility industry. Through consulting, meter deployment and management, data collection and processing, and information analysis, RMS helps clients optimize networks, achieve operating efficiency, and increase customer loyalty. Electricity is the most versatile, widely used form of energy available. Unlike other forms though, it cannot be stored. So providers must carefully moni- tor demand and meticulously control production. Pro- duction companies that generate, transmit, distribute, or trade electricity need accurate measurements of production and consumption. They must analyze data promptly to ensure that they manage this energy resource correctly and that power is always avail- able when people want it. As the industry becomes increasingly deregulated, to remain competitive, to reduce costs, and to increase efficiency, utilities and municipalities want to monitor their customers’ use of power closely. They increasingly rely on such com- panies as Schlumberger RMS to develop solutions to meet these operations and maintenance needs. Such systems can include a wide range of value- added services, such as automated meter reading, in-home messaging, security controls, remote discon- nect, and other two-way services, that can give a util- ity provider a competitive advantage. We developed a solution to the problem of opti- mally locating hardware for automated meter read- ing (AMR). The meters send out their readings as radio-frequency (RF) signals, which are captured by a receiver nearby and relayed to a central data ware- house. A receiver can capture readings from at most 540 meters within the range of a few hundred yards. This range of coverage cannot be increased without adversely affecting the life span of the battery in the meter. In most cases, the ideal place for receivers is high on the electricity poles the utility company owns. The coverage area of a pole is the area from which meters can successfully transmit to a receiver located on that pole. The coverage area depends on the prop- erties of the pole (height, material, and so forth) and its surroundings (buildings, trees, rural or urban, and so forth). To minimize the cost of the receivers, 208