Question 3. The Blue Valley Power Plant generates electricity for a region with varying energy demands....

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Question 3. The Blue Valley Power Plant generates electricity for a region with varying energy demands. The Power Plant Management is planning the energy production strategy for the next four months to meet demand while minimizing costs. The power plant has three operating configurations: 8000 kWh/Month, 10000 kWh/Month, 12000 kWh/Month. The region's energy demand fluctuates between 8000, 10000 and 12000 kWh with each having same probability. The Power Plant Management incurs costs based on energy production and demand conditions: 2 If demand of the region is not met, there is a cost of $5 per kWh of unmet demand. Increase in the energy production amount requires setup changes. Therefore, increasing the energy production amount costs $300 per setup change. Demand of the first month is 10000 kWh. Production decisions are made after demand is realized at each stage. a) Draw the appropriate scenario tree for the problem. b) Define your decision variables clearly for each stage. c) Construct the appropriate four-stage stochastic linear programming problem. Question 3. The Blue Valley Power Plant generates electricity for a region with varying energy demands. The Power Plant Management is planning the energy production strategy for the next four months to meet demand while minimizing costs. The power plant has three operating configurations: 8000 kWh/Month, 10000 kWh/Month, 12000 kWh/Month. The region's energy demand fluctuates between 8000, 10000 and 12000 kWh with each having same probability. The Power Plant Management incurs costs based on energy production and demand conditions: 2 If demand of the region is not met, there is a cost of $5 per kWh of unmet demand. Increase in the energy production amount requires setup changes. Therefore, increasing the energy production amount costs $300 per setup change. Demand of the first month is 10000 kWh. Production decisions are made after demand is realized at each stage. a) Draw the appropriate scenario tree for the problem. b) Define your decision variables clearly for each stage. c) Construct the appropriate four-stage stochastic linear programming problem.

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