Chandler Oil Company has 5,000 barrels of oil 1 and10,000 barrels of oil 2. The company sells two products:gasoline and heating oil. Both products are produced bycombining oil 1 and oil 2. The quality level of each oil isas follows: oil 1—10; oil 2—5. Gasoline must have anaverage quality level of at least 8, and heating oil at least 6.Demand for each product must be created by advertising.Each dollar spent advertising gasoline creates 5 barrels ofdemand and each spent on heating oil creates 10 barrels ofdemand. Gasoline is sold for $25 per barrel, heating oil for$20. Formulate an LP to help Chandler maximize profit.Assume that no oil of either type can be purchased.
Chandler Oil Company has 5,000 barrels of oil 1 and
10,000 barrels of oil 2. The company sells two products:
gasoline and heating oil. Both products are produced by
combining oil 1 and oil 2. The quality level of each oil is
as follows: oil 1—10; oil 2—5. Gasoline must have an
average quality level of at least 8, and heating oil at least 6.
Demand for each product must be created by advertising.
Each dollar spent advertising gasoline creates 5 barrels of
demand and each spent on heating oil creates 10 barrels of
demand. Gasoline is sold for $25 per barrel, heating oil for
$20. Formulate an LP to help Chandler maximize profit.
Assume that no oil of either type can be purchased.
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