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Rakesh must plan power procurement from various suppliers for January, February, and March while minimizing costs. He is given a specification sheet rating suppliers on four parameters and requirements for those parameters each month. Rakesh must meet a projected demand of 600MW in January/February and 700MW in March. Additionally, at least 40% of power must come from Mundra Thermal Power Station due to an agreement. Rakesh knows his boss will ask him to reduce costs by another 5% and needs to decide how much to procure from each supplier to minimize total procurement costs within the given constraints.

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Nikher Verma
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165 views

Assignment

Rakesh must plan power procurement from various suppliers for January, February, and March while minimizing costs. He is given a specification sheet rating suppliers on four parameters and requirements for those parameters each month. Rakesh must meet a projected demand of 600MW in January/February and 700MW in March. Additionally, at least 40% of power must come from Mundra Thermal Power Station due to an agreement. Rakesh knows his boss will ask him to reduce costs by another 5% and needs to decide how much to procure from each supplier to minimize total procurement costs within the given constraints.

Uploaded by

Nikher Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Optimization Modeling

Rakesh is an analyst working at Reliable Power Corporation. He has been asked to


plan the procurement of power from the suppliers for the months of January,
February and March of next year. He has been given the following specification
sheet to help him plan.

Plant

Vindhyachal
Super Thermal
Power Station
Mundra
Thermal Power
Station
Amravati
Thermal Power
Plant
Trombay
Thermal Power
Station
Jindal Megha
Power Plant
Nashik Thermal
Power Station
Kota Super
Thermal Power
Plant
Farakka Super
Thermal Power
Station
Tehri Dam

Region

Qty
Parame Parame Paramet Paramete
Power
Availa
Price (per
ter 1
ter 2
er 3 (1- r 4 (1-10
Transmiss
ble (in
MW)
(ratio) (in %) 10 Scale)
Scale)
ion Cost
MW)

Vindhya
Nagar

672

10.5

0.60%

$
500.00

$
100.00

Mundra

400

6.5

1.40%

$
310.00

Amravati

1200

12

0.95%

$
$
750.00 150.00

Trombay

168

11

1.00%

$
600.00

$
60.00

84

12

0.70%

Nashik

210

10

0.70%

Kota

588

1.35%

$
600.00
$
625.00
$
440.00

$
75.00
$
50.00
$
120.00

Farakka

168

15

1.10%

$
600.00

$
110.00

300

1.30%

Bhakra Dam

Uttarakha
nd
Punjab

210

13

1.30%

Hirakud Dam

Odisha

180

14

0.50%

$
300.00
$
460.00
$
505.00

$
90.00
$
130.00
$
115.00

Raigarh

The specification sheet rates power on four parameters.


The requirements have been laid down as follows:
Reliable Power would like to look at the lowest cost purchase plan for January,
February and March. The projected demand is 600 MW in January and February, and
700 MW in March.

Reliable Power has entered into an exclusive agreement with the state of Gujarat
which provides the company with tax incentives as long as the company buys at
least 40% of its power each month from Mundra Thermal Power Station.
Parameter 1 must stay between 11. 5 and 12.5 in each months purchase
Parameter 2 must remain between 0.75 and 1 percent.
Parameter 3 must stay at 4 or lower.
Parameter 4 must remain between 4.5 and 5.5.
Rakeshs boss is a unique individual. Rakesh know that irrespective of the
procurement plan that he comes up with, his boss would invariably ask him to do
better. In fact, Rakesh is pretty much sure that his boss would ask him to reduce the
cost by another 5%.
Rakesh has to minimize procurement cost. He has to decide on the amount of power
to be bought from the different power stations. Help him prepare his procurement
plan.

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