Question: 4 . A plant has been studying its maintenance load for the last three years. The load is found to be mainly of three types.

4. A plant has been studying its maintenance load for the last three years. The load is found to be mainly of three types. Mechanical, electrical, and civil. The output of this study is to estimate the daily load. The load is divided in two priorities. Priority 1 and priority 2. Priority 1 requires highly skilled trade and priority 2 can be executed by either highly skilled or regular trade. The cost of regular trader usually 70% of the highly skilled trade. The hourly cost of highly skilled mechanical trade is 120 Saudi Riyal (SR). The hourly cost of highly skilled electrical trade is 100 SR and the cost of highly skilled civil trade is 80 SR. The daily demand for priority 1 mechanical work is uniformly distributed with mean 50 hours and lower and upper limits of 40 and 60. The daily demand for priority 2 mechanical work is distributed exponentially with a mean 100 hours. The daily demand for priority 1 electrical work is deterministic and equal 60 and for priority 2 is also deterministic and its value is 100 hours. The daily demand for civil is all priority 2 and its deterministic of value 40 hours. The productivity of highly skilled trade for all specialties and type of work is 80% and for regular trade is 70%. The management wants priority 1 to be completed with high reliability that exceeds 99% and for priority 2 the reliability should exceed only 80%.
(i) Formulate an optimization model to determine the optimal number of hired manhours to hire in each trade mechanical, electrical and civil taking care of the deterministic and random characteristics of the maintenance load. (8)
(ii) Transform the model you formulated in (i) in this question to obtain its certainty equivalent.(4)

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