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Riverside oil company in eastern Kentucky produces 3 different grades of gasoline. They are regular, premium, and supreme grades. Each barrel of regular grade sells for $82 while premium grade sells for $88 per barrel and supreme grade sells for $89 per barrel. Petroleum component A, B, and C are purchased to be blended together for the production of three different grades of gasoline. The availability and cost of petroleum components A, B, and C are given in the following table.
Petroleum Component
Barrels available
Cost per Barrel
A
10000
$32
B
12000
$45
C
15000
$39
Also, the blending specifications for these three grades of gasoline are as follows:
Product
Blending Specification
Regular
at least 25% of A; no more than 30% of B; no restriction on C
Premium
at least 35% of B; no restriction on A and C
Supreme
no more than 25% of A; no restriction on B; at least 50% on C
Our goal is to maximize the profit from this production process.
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