Consider the following change. There is a probability p_strike that workers go on strike during production, changing the capacity from 6000 in the no-strike scenario, to a combined maximum of 4000 hours. In addition, labor requirements for Product 2 will also if a strike takes place according to the data in the table. The changes are summarized in the table below.

Formulate a two-stage stochastic program based on this information to maximize the expected net revenue. The decisions to manufacture a product have to be taken at present time when set-up costs must be incurred. On the other hand, the decisions related to how much to manufacture have to be made during production (second-stage) at what time the uncertainty of strike has been resolved.

Product Max. 1 2 3 4 Start-up cost, $ 50,000 40,000 70,000 60,000 Marginal revenue, $ 70 00' 90 80' Labor per unit, hours 5 3 6 4 6000 Labor per unit during strike, hours 5 8 6 4 4000