1. Three electric power plants with capacities of 25, 40, 15, and 30 million kWh supply electricity to four cities. The maximum demands at the three cities are estimated at 30, 40, 35, and 25 million kWh. The price per million kWh at the four cities is given in Table. There is a penalty for each unmet city unit of demand. With city 1, a penalty cost of $950 is incurred; with city 2, $800; with city 3 $900 and with city 4, $1100 .The utility company wishes to determine the most economical plan for the distribution of energy. Cityl City2 City3 City4 Plant1 $600 $700 $750 $400 Plant2 $450 $650 S800 $500 Plant3 $320 $300 $675 $450 Plant4 $500 $480 S700 $450 Answer these questions according to problem given above. a) Set up balanced mathematical model. b) Create transportation table. c) Solve this problem by using north-west method. d) Solve this problem by using minimum-cost method. e) Select non-improved solution that you found, try to reach optimal value by using transportation simplex method. n Compare the results that you found and try to explain the differences. Which algorithms are more efficient or not?

The Candle Company plans to open a new retail store in Portland, Maine. The store will sell specialty candles for an average of $10 each. The average variable costs per candle are as follows: Wax $4 Other additives $2 Base $1 The company is negotiating its lease for the new location. The landlord has offered two leasing options: Option A) a lease of $2,500 per month; or Option B) a monthly lease cost of $2,000 plus 10% of the company's monthly sales revenue. The lease option that is more attractive for the company under its current sales expectations is option B, the fixed lease payment plus sales based commission because it results in the lowest total lease costs The indifference point is The company expects to sell approximately 400 candles per month. Requirement 2. At what level of sales (in units) would the company be indifferent between the two lease options? Show your proof. candles. Begin by selecting the equation to determine the indifference point. (Abbreviations used" FC =…

Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows:     Demand Staffing Options High Medium Low Own staff 600 550 350 Outside vendor 900 650 450 Combination 700 600 400     a. If the demand probabilities are 0.4, 0.25, and 0.35, which decision alternative will minimize the expected cost of the data processing operation? Own Staff What is the expected annual cost associated with that recommendation? If required, round your answer to the nearest thousand of dollars.     Expected annual cost = $  ___________

Problem 2. An electric switch manufacturing company has to choose one of three different assembly methods. Method A will have first cost of $ 40,000, an annual operating cost of $9,000 and a service life of 2 years. Method B will cost $80,000 to buy and will have an annual operating cost of $6,000 over its 4 year service life. Method C will cost $130,000 initially with an annual operating cost of $4,000 over its 8-year life. Methods A and B will have no salvage value, but method C will have some equipment worth an estimated $12,000. Which method should be selected? Use present worth analysis at an interest rate of 10% per year.