A company has a project for building and operating a new electricity generation station. The operation costs of generators is given by: Co = MHN 3 %3D Where M is constant, H is the operation hours, and N is the number of generators. It is known that, when the company uses 12 generators, the operation cost is found to be $ 250 per hour. Other overhead costs including electricity transformation and maintenance are estimated to be $40000 for each hour per generator. 1- What is the optimum number of generators to be used in order to minimize costs? 2- How to ensure your answer to part (1) is correct.

A company has a project for building and operating a new electricity generation station. The operation costs of generators is given by: Co = MHN 3 %3D Where M is constant, H is the operation hours, and N is the number of generators. It is known that, when the company uses 12 generators, the operation cost is found to be $ 250 per hour. Other overhead costs including electricity transformation and maintenance are estimated to be $40000 for each hour per generator. 1- What is the optimum number of generators to be used in order to minimize costs? 2- How to ensure your answer to part (1) is correct.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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