Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Q10 Quantitative Problem
The State of Maryland is considering a requirement that for every ton of CO2 produced by out-
of-state electricity producers, a permit costing $40 must be purchased. It takes approximately
0.5 tons of coal to make 1 MWh of electricity, and every 1 ton of coal produces 2.86 tons of CO2.
Write out the linear variable cost function for a coal-fired power plant in Ohio selling electricity
to Maryland utilities which includes the permit cost assuming that the current cost of coal is
$150 a ton and that this coal fired plant has an annual fixed cost of $1,000,000. (You may use
the variable q to denote quantity of electricity in MWh in the cost function.)
Intermediate Steps
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Transcribed Image Text:Q10 Quantitative Problem The State of Maryland is considering a requirement that for every ton of CO2 produced by out- of-state electricity producers, a permit costing $40 must be purchased. It takes approximately 0.5 tons of coal to make 1 MWh of electricity, and every 1 ton of coal produces 2.86 tons of CO2. Write out the linear variable cost function for a coal-fired power plant in Ohio selling electricity to Maryland utilities which includes the permit cost assuming that the current cost of coal is $150 a ton and that this coal fired plant has an annual fixed cost of $1,000,000. (You may use the variable q to denote quantity of electricity in MWh in the cost function.) Intermediate Steps Enter your answer here
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