MGM 315 Case 1.docx - Case Problem 5 DUKE ENERGY COAL...

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Finite Mathematics for the Managerial, Life, and Social Sciences: An Applied Approach
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Chapter 4 / Exercise 27
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Case Problem 5 DUKE ENERGY COAL ALLOCATION 1. Determine how much coal to purchase from each of the mining companies and how it should be allocated to the generating units. What is the cost to purchase, deliver, and process the coal? 2. Compute the average cost of coal in cents per million BTUs for each generating unit (a measure of the cost of fuel for the generating units). 3. Compute the average number of BTUs per pound of coal received at each generating unit (a measure of the energy efficiency of the coal received at each unit). 4. Suppose that Duke Energy can purchase an additional 80,000 tons of coal from American Coal Sales as an “all or nothing deal” for $30 per ton. Should Duke Energy purchase the additional 80,000 tons of coal? 5. Suppose that Duke Energy learns that the energy content of the coal from Cyprus Amax is actually 13,000 BTUs per pound. Should Duke Energy revise its procurement plan? 6. Duke Energy has learned from its trading group that Duke Energy can sell 50,000 megawatt-hours of electricity over the grid (to other electricity suppliers) at a price of $30 per megawatt-hour. Should Duke Energy sell the electricity? If so, which generating units should produce the additional electricity? Model: Decision Variables Let Xit = Tons of coal purchased from supplier i and used by generating unit t. i=1(RAG), 2 (Peabody), 3(American),4(Consol),5(Cyprus),6(Addington),7(Waterloo)
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Finite Mathematics for the Managerial, Life, and Social Sciences: An Applied Approach
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Chapter 4 / Exercise 27
Finite Mathematics for the Managerial, Life, and Social Sciences: An Applied Approach
Tan
Expert Verified

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