Hansen Controls has been awarded a contract for a large number of control panels. To meet this demand, it will use its existing plants in San Diego and Houston, and consider new plants in Tulsa, St. Louis, and Portland. Finished control panels are to be shipped to Seattle, Denver, and Kansas City. Pertinent information is given in the table.
Develop a model whose solution would reveal which plants to build and the optimal shipping schedule.
Definitions:
Wealth
Refers to the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions.
Expected Utility Function
A mathematical representation of a decision-maker's preferences concerning uncertain outcomes, factoring in the utility of each outcome and its probability.
Utility Function
A formulation used in economics to depict how different combinations of goods or services yield varying levels of happiness or utility to an individual.
Risk Neutral
A description of an individual or entity that does not show a preference for risk, valuing all investments purely by their expected return without concern for their risk.
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