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Nonlinear Programming Problem (10 Points): Virgina Dominion Energy (VDE) faces demands during both peak-time and off-time periods. VDE must determine the prices per kilowatt hour
Nonlinear Programming Problem (10 Points): Virgina Dominion Energy (VDE) faces demands during both peak-time and off-time periods. VDE must determine the prices per kilowatt hour (kwh) to charge during both peak-time and off-time periods. The daily demand for power during each period (in kwh) is related to prices as follows: D_p=50-0.2P_p 0.1P_o D_o=45 0.1P_p-0.3P_o Here, D_p and P_p are demand and price during peak-times, and D_o and P_o are demand and price during off-times. Assume that it costs VDE $15 per day to maintain one kwh of capacity. The company wants to determine a pricing strategy and a capacity level that maximizes its profit. Define decision variables. Write down the mathematical model formulation with objective function and constraints. (5 points) Implement the above optimization problem in Excel. What are the prices and capacity level that maximizes the profit? (2 points) Construct a table to show how the optimal profit varies with the different daily cost per kwh. (Fill out the following table) (2 points). Cost / kwh Optimal profit $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
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