Probability Distributions of Incremental Cost of Production & Production Cost

Abstract
A bivariate probability distribution of load and incremental cost of production (λ) taking into consideration machine outages has been produced. Marginal distributions obtained from the bivariate density give the probability distribution of λat any chosen load and the distribution of load at any chosen λ. The densities have been used to obtain a probability distribution of production cost. The mean of the distribution corresponds with the expected cost of production obtained by using Baleriaux technique of similation. A model resembling an Eastern Canadian utility has been used to test the method.

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