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Fuel Production. Bay Oil produces two types of fuel (regular and super) by mixing three ingredients. The major distinguishing feature of the two products is the octane level required. Regular fuel must have a minimum octane level of 90, whereas super must have a level of at least 100. The cost per barrel, octane levels, and available amounts (in barrels) for the upcoming two-week period appear in the following table, along with the maximum demand for each end product and the revenue generated per barrel: Ingredient Cost/Barrel Octane Available (barrels) 1 $16.50 100 110,000 $14.00 87 350,000 3 $17.50 110 300,000 Revenue/Barrel Max Demand (barrels) Regular $18.50 350,000 Super $20.00 500,000

Fuel Production. Bay Oil produces two types of fuel (regular and super) by mixing three ingredients. The major distinguishing feature of the two products is the octane level required. Regular fuel must have a minimum octane level of 90, whereas super must have a level of at least 100. The cost per barrel, octane levels, and available amounts (in barrels) for the upcoming two-week period appear in the following table, along with the maximum demand for each end product and the revenue generated per barrel: Ingredient Cost/Barrel Octane Available (barrels) 1 $16.50 100 110,000 $14.00 87 350,000 3 $17.50 110 300,000 Revenue/Barrel Max Demand (barrels) Regular $18.50 350,000 Super $20.00 500,000

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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ssume the maximum demand for Super is 600,000 barrels.

What is the optimal maximum profit?

 

Hints: 

There are six decision variables are as follows: 

R1: # of barrels of ingredient 1 used in Regular fuel

R2: # of barrels of ingredient 2 used in Regular fuel

R3: # of barrels of ingredient 3 used in Regular fuel

S1: # of barrels of ingredient 1 used in Super fuel

S2: # of barrels of ingredient 2 used in Super fuel

S3: # of barrels of ingredient 3 used in Super fuel

 

Some calculations you would need in the constraints:

The total # of barrels for Regular would be R1+R2+R3.

The total # of barrels for Super would be S1+S2+S3.

The total # of barrels of Ingredient 1 would be R1+S1.

The total # of barrels of Ingredient 2 would be R2+S2.

The total # of barrels of Ingredient 3 would be R3+S3.

 
Fuel Production. Bay Oil produces two types of fuel (regular and super) by mixing three ingredients. The major distinguishing feature of the two products is the octane level required. Regular fuel must have a minimum octane level of 90, whereas super must have a level of at least 100. The cost per barrel, octane levels, and available amounts (in barrels) for the upcoming two-week period appear in the following table, along with the maximum demand for each end product and the revenue generated per barrel: Ingredient Cost/Barrel Octane Available (barrels) 1 $16.50 100 110,000 $14.00 87 350,000 3 $17.50 110 300,000 Revenue/Barrel Max Demand (barrels) Regular $18.50 350,000 Super $20.00 500,000
Transcribed Image Text:Fuel Production. Bay Oil produces two types of fuel (regular and super) by mixing three ingredients. The major distinguishing feature of the two products is the octane level required. Regular fuel must have a minimum octane level of 90, whereas super must have a level of at least 100. The cost per barrel, octane levels, and available amounts (in barrels) for the upcoming two-week period appear in the following table, along with the maximum demand for each end product and the revenue generated per barrel: Ingredient Cost/Barrel Octane Available (barrels) 1 $16.50 100 110,000 $14.00 87 350,000 3 $17.50 110 300,000 Revenue/Barrel Max Demand (barrels) Regular $18.50 350,000 Super $20.00 500,000
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