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Exercise 1.16 A manager of an oil refinery has 8 million barrels of crude oil A and 5 million barrels of crude oil B allocated for production during the coming month. These resources can be used to make either gasoline, which sells for $38 per barrel, or home heating oil, which sells for $33 per barrel. There are three production processes with the following characteristics: Input crude A Input crude B Output gasoline Output heating oil Cost Process 1 3 5 4 3 $51 Process 2 1 1 1 1 $11 Process 3 5 3 3 4 $40 All quantities are in barrels. For example, with the first process, 3 barrels of crude A and 5 barrels of crude B are used to produce 4 barrels of gasoline and

Exercise 1.16 A manager of an oil refinery has 8 million barrels of crude oil A and 5 million barrels of crude oil B allocated for production during the coming month. These resources can be used to make either gasoline, which sells for $38 per barrel, or home heating oil, which sells for $33 per barrel. There are three production processes with the following characteristics: Input crude A Input crude B Output gasoline Output heating oil Cost Process 1 3 5 4 3 $51 Process 2 1 1 1 1 $11 Process 3 5 3 3 4 $40 All quantities are in barrels. For example, with the first process, 3 barrels of crude A and 5 barrels of crude B are used to produce 4 barrels of gasoline and

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Exercise 1.16 A manager of an oil refinery has 8 million barrels of crude oil A and 5 million barrels of crude oil B allocated for production during the coming month. These resources can be used to make either gasoline, which sells for $38 per barrel, or home heating oil, which sells for $33 per barrel. There are three production processes with the following characteristics: Input crude A Input crude B Output gasoline Output ating oil Cost Process 1 Process 2 3 1 5 4 3 $51 1 1 1 $11 Process 3 5 3 3 4 $40 All quantities are in barrels. For example, with the first process, 3 barrels of crude A and 5 barrels of crude B are used to produce 4 barrels of gasoline and
Transcribed Image Text:Exercise 1.16 A manager of an oil refinery has 8 million barrels of crude oil A and 5 million barrels of crude oil B allocated for production during the coming month. These resources can be used to make either gasoline, which sells for $38 per barrel, or home heating oil, which sells for $33 per barrel. There are three production processes with the following characteristics: Input crude A Input crude B Output gasoline Output ating oil Cost Process 1 Process 2 3 1 5 4 3 $51 1 1 1 $11 Process 3 5 3 3 4 $40 All quantities are in barrels. For example, with the first process, 3 barrels of crude A and 5 barrels of crude B are used to produce 4 barrels of gasoline and
3 barrels of heating oil. The costs in this table refer to variable and allocated overhead costs, and there are no separate cost items for the cost of the crudes. Formulate a linear programming problem that would help the manager maximize net revenue over the next month.
Transcribed Image Text:3 barrels of heating oil. The costs in this table refer to variable and allocated overhead costs, and there are no separate cost items for the cost of the crudes. Formulate a linear programming problem that would help the manager maximize net revenue over the next month.
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