Specify the stage, state, action, state transition function, contribution function, formulate the dynamic recursion, and solve using paper/pen/calculator or Matlab or Excel or any other software. 2) A machine in a temporary factory is inspected every 2 years for the first 5 years and every year after the 5th year. A mc can stay upto a max of 8 years in the system. At the time of inspection you decide to either sell (or replace with a new one) or continue to run the same machine. In any given year, you must have only 1 machine working. The first machine is purchased at the beginning of year 1 and at the end of year 8 the factory is closed and the machine has to be sold. a) Draw the network diagram for machine replacement b) Given cost of maintenance is an additional $100/year for every year that the machine is working, salvage reduces $50/year from the cost for every year that the machine is kept, cost of new machine is $200, revenue generated is $300 per year of working, and discounting factor for value of money is 0.9 per year. Solve the network to find the optimal replacement policy that maximizes the profit=revenue - cost. Specify the stage, state, action, state transition function, contribution function, formulate the dynamic recursion, and solve using paper/pen/calculator or Matlab or Excel or any other software. 2) A machine in a temporary factory is inspected every 2 years for the first 5 years and every year after the 5th year. A mc can stay upto a max of 8 years in the system. At the time of inspection you decide to either sell (or replace with a new one) or continue to run the same machine. In any given year, you must have only 1 machine working. The first machine is purchased at the beginning of year 1 and at the end of year 8 the factory is closed and the machine has to be sold. a) Draw the network diagram for machine replacement b) Given cost of maintenance is an additional $100/year for every year that the machine is working, salvage reduces $50/year from the cost for every year that the machine is kept, cost of new machine is $200, revenue generated is $300 per year of working, and discounting factor for value of money is 0.9 per year. Solve the network to find the optimal replacement policy that maximizes the profit=revenue - cost