Question: Problem 2. Solcon Energy has three power plants (1, 2, and 3) that supply power to four customers ( H is a hospital, C is

 Problem 2. Solcon Energy has three power plants (1, 2, and3) that supply power to four customers ( H is a hospital,

Problem 2. Solcon Energy has three power plants (1, 2, and 3) that supply power to four customers ( H is a hospital, C is a chemical plant, M is a shopping mall, and F is a factory). The maximum delivery capacity of the plants and the amount of electricity requested by the customers (all in thousands of kilowatt hour (kWh)) are given below, in the left and middle table respectively. ( in 1,000kWh ) Detzvery cost (jor 1, , vu wn ) Electricity produced cannot be stored and must be sent to the customers. Each customer must receive exactly the amount of electricity requested above. The cost of sending 1,000kWh of electricity from the plants to the customers is given above, in the table on the right. Solcon Energy wishes to meet all customer demand at minimum total cost, while respecting the capacity requirements. To this end, the problem is formulated as a linear programming model (in fact a transportation problem), implemented in Excel, and solved to optimality. The spreadsheet implementation and the corresponding Sensitivity Report are presented below. 6. Write down the formulas that should go in cells B19 and G11. Answer the following questions based on this sensitivity report. Do not implement and solve the spreadsheet model. Each question below should be considered independent of each other. Each answer should be justified with at least one sentence. For any question "Cannot determine based on the sensitivity report" is a possible answer (with justification). 7. If the demand of customer F decreases by 1,500kw/h, by how much could we reduce the total cost? Will the optimum solution change? Canntuinta 8. If the demand of customer H decreases by 2,500kw/h, by how much could we reduce the total cost? Will the optimum solution change? 9. If the capacity of plant 1 increases by 1,000kw/h, by how much could we reduce the total cost? Will the optimum solution change? 10. A competitor energy company offers to supply customer F at a cost of $7 per 1,000kw/h. Will accepting this offer reduce our total cost? Will the optimum solution change? 11. It currently costs $23 per 1,000kWh energy to ship from plant 3 to customer C, and in this optimum solution we do not ship anything from plant 3 to customer C. Suppose that Solcon Energy determined that there was an error in this cost and it should have been $13 per 1,000kWh instead of \$23. After correcting this error, would Solcon Energy send any shipments from plant 3 to customer C in the optimal solution

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!