Labors Hours Required (Hours/Unit) Hours Department Product 1 Product 2 Available A 1 0.35 100 B 0.3 0.2 36 C 0.2 0.5 50 Profit Contribution/Unit 30 15 X₁ Potential Locations for Substations A B C D E E G Areas Covered 1,5,7 3, 4, 6 1, 2, 5, 7 4,5,6 1,3,5 1, 5, 6, 7 2,4,5 Cost to Maintain $150,000 $375,000 $500,000 $300,000 $325,000 $400,000 $225,000 A B C D E F G Area 1 1 0 1 0 1 1 0 Area 2 0 0 1 0 0 0 1 Area 3 0 1 0 0 1 0 0 Area 4 0 1 0 1 0 0 1 Area 5 1 0 1 1 1 1 1 Area 6 0 1 0 1 0 1 0 Area 7 1 0 1 0 0 1 0
1) How much would you be willing to pay per hour of overtime in Department A, B and C? 2) If your goal changed to provide coverage at the lowest cost to maintain: a) How many substations would you place? b) How much would it cost to maintain your selected stations?
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