Cost-capacity equations define the relation between 2 capacities: C1 = cost at capacity Q1 and C2 = cost at capacity Q2. Cost capacity exponents (x) do not change with time. However, in this particular example, we multiplied by the cost index (It / Io) to adjust for time, similar to what we do in the cost index method (ua-cam.com/video/X_UYRh0QICw/v-deo.html). The cost index method indicates the change in cost over time. Hope this helps! Let me know if you have further questions.
Hello
How can we determine the value of C1 and C2?
are they dependent on the time or what?
Cost-capacity equations define the relation between 2 capacities:
C1 = cost at capacity Q1
and
C2 = cost at capacity Q2.
Cost capacity exponents (x) do not change with time.
However, in this particular example, we multiplied by the cost index (It / Io) to adjust for time, similar to what we do in the cost index method (ua-cam.com/video/X_UYRh0QICw/v-deo.html). The cost index method indicates the change in cost over time.
Hope this helps! Let me know if you have further questions.