Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown in the file P05_74.xlsx (See Below). a. Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0". (See Photo) P05_74.xlsx Ewing Oil data Unit shipping costs (per 1000 barrels) To Dallas Houston New York Chicago From Los Angeles $3,250 $3,300 San Diego $3,400 $3,350 Dallas $3,600 $3,100 Houston $3,550 $3,200
Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown in the file P05_74.xlsx (See Below).
a. Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0".
(See Photo)
P05_74.xlsx
Ewing Oil data | |||||
Unit shipping costs (per 1000 barrels) | |||||
To | |||||
Dallas | Houston | New York | Chicago | ||
From | Los Angeles | $3,250 | $3,300 | ||
San Diego | $3,400 | $3,350 | |||
Dallas | $3,600 | $3,100 | |||
Houston | $3,550 | $3,200 |
![Flows (in 1,000s of barrels)
To
San
Dallas
Houston
LA
Diego
Dallas
Houston
Refined
Refined
NY
Chicago
From
LA
600
San Diego
400
Dallas
Houston
90
Dallas
Refined
Houston
600
90
Refined
b. If each refinery had a capacity of 380,000 barrels per day, by how much would the total cost to the company change?
Total Cost: $
8,699,00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff71e86d8-ea54-48a2-bc09-60c77593b146%2F4f220c53-6437-4a23-b9ac-ca4ec5abf9bb%2Fmgk269_processed.png&w=3840&q=75)
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