Abstract
Optimizing the use of an exhaustible resource is a special case of the problem of storing a resource available as a periodic function of time. An extension of Hotelling's rule describes optimal storage policies: When water is in storage, its price should rise at the rate of interest, except that with contents at capacity the price must go up faster than the rate of interest. When contents are exhausted the price rises no more quickly than the rate of interest, and it must fall at some time. A rule is given for optimal storage capacity, and a version of Hotelling's rule is found for approximately optimal policies.
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