GulfOil Company (GOC) can buy two types of crude oil: light oil at $49/barrel and heavy oil $45/barrel. When a barrel of oil is refined it yields gasoline, jet fuel, and kerosene in the quantities, shown in the table (in terms of barrel of output per barrel of input). GOC has promised to deliver at least 800,000 barrels of gasoline, 900,000 barrels of jet fuel and 850,000 barrels of kerosene. a) In addition to the existing constraints, suppose that GOC management wants to deliver at least 3 million barrels of refined products. What will be the new optimal solution with this constraint? b) Did the objective function value improve compared to the one in option (a)? Why (not)?
GulfOil Company (GOC) can buy two types of crude oil: light oil at $49/barrel and heavy oil $45/barrel. When a barrel of oil is refined it yields gasoline, jet fuel, and kerosene in the quantities, shown in the table (in terms of barrel of output per barrel of input). GOC has promised to deliver at least 800,000 barrels of gasoline, 900,000 barrels of jet fuel and 850,000 barrels of kerosene.
a) In addition to the existing constraints, suppose that GOC management wants to deliver at least 3 million barrels of refined products. What will be the new optimal solution with this constraint?
b) Did the objective function value improve compared to the one in option (a)? Why (not)?
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