2.2 A refinery has two crude oils: 1 Crude A costs $120/barrel (bbl) and 20,000
ID: 1860491 • Letter: 2
Question
2.2 A refinery has two crude oils:
1 Crude A costs $120/barrel (bbl) and 20,000 bbl are available
2 Crude B costs $150/barrel and 30,000 bbl are available.
The company manufactures gasoline and lube oil from its crudes. Yield and sale price per barrel and markets are shown in Table E 2.2. How much crude oil should the company use to maximize profit? Formulate the optimum design problem
Product Yield/bbl sale price per bbl ($) market (bbl)
crude A crude B
Gasoline 0.6 0.8 200 20,000
Lube oil 0.4 0.2 450 10,000
Explanation / Answer
crude a amt = a
crude a used in gasoline = ag
crude b used in gasoline = (20,000- 0.6ag)/0.8
crude a used in lube = a - ag
cude b used in lube = (10000 - 0.4a + 0.4ag)/0.2
optimize(minimize) = 120a + 150 [ (20,000-0.6ag)/0.8 + (10000 - 0.4a + 0.4ag)/0.2 ]
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