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  • Ex3 1

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    Part A summarizes the costs and profits of a company predicting and selling electricity over 6 time periods. The company underestimated demand in period 3, resulting in losses of $1803. Overall, the company lost $1738.50. Part B recalculates costs and profits using a higher price of $25.52/unit. At this price, the company breaks even with a total profit of $1.90. Raising the price allowed the company to cover its costs and losses from period 3.

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    Ex3.1

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    Part A summarizes the costs and profits of a company predicting and selling electricity over 6 time periods. The company underestimated demand in period 3, resulting in losses of $1803. Overall, the company lost $1738.50. Part B recalculates costs and profits using a higher price of $25.52/unit. At this price, the company breaks even with a total profit of $1.90. Raising the price allowed the company to cover its costs and losses from period 3.

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    6 views1 page

    Ex3 1

    Uploaded by

    vafae.soheil
    Part A summarizes the costs and profits of a company predicting and selling electricity over 6 time periods. The company underestimated demand in period 3, resulting in losses of $1803. Overall, the company lost $1738.50. Part B recalculates costs and profits using a higher price of $25.52/unit. At this price, the company breaks even with a total profit of $1.90. Raising the price allowed the company to cover its costs and losses from period 3.

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    of 1

    Part A

    Time Duration 1 2 3 4 5 6 Total Price for customer


    Predicted Load 120 230 310 240 135 110 1145 24
    Average cost 22.5 24.5 29.3 25.2 23.1 21.9 146.5
    Load 110 225 330 250 125 105 1145
    Spot Price 21.6 25.1 32 25.9 22.5 21.5 148.6
    Load differences 10 5 -20 -10 10 5 0
    Income From Customer 2640 5400 7920 6000 3000 2520 27480
    Income from Sale in Spot Market 216 125.5 0 0 225 107.5 674
    Cost of Buy From Spot Market 0 0 640 259 0 0 899
    Cost of Predicted Energy 2700 5635 9083 6048 3118.5 2409 28993.5
    Total Income 2856 5525.5 7920 6000 3225 2627.5 28154
    Total Cost 2700 5635 9723 6307 3118.5 2409 29892.5
    Total Profit 156 -109.5 -1803 -307 106.5 218.5 -1738.5
    Part B
    Time Duration 1 2 3 4 5 6 Total Price for customer when Profit is 0
    Predicted Load 120 230 310 240 135 110 1145 25.52
    Average cost 22.5 24.5 29.3 25.2 23.1 21.9 146.5 new price = (Total Cost A - Income spot Market A)/load A
    Load 110 225 330 250 125 105 1145
    Spot Price 21.6 25.1 32 25.9 22.5 21.5 148.6
    Load differences 10 5 -20 -10 10 5 0
    Income From Customer 2807 5742 8422 6380 3190 2679.6 29220.4
    Income from Sale in Spot Market 216 125.5 0 0 225 107.5 674
    Cost of Buy From Spot Market 0 0 640 259 0 0 899
    Cost of Predicted Energy 2700 5635 9083 6048 3118.5 2409 28993.5
    Total Income 3023 5867.5 8422 6380 3415 2787.1 29894.4
    Total Cost 2700 5635 9723 6307 3118.5 2409 29892.5
    Total Profit 323 232.5 -1301 73 296.5 378.1 1.9

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