Enough regular gasoline to meet the demand

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Reference no: EM13318011

The Low Knock Oil Company produces two grades of cut-rate gasoline for industrial distri-bution. The grades, regular and economy, are produced by refining a blend of two types of crudeoil, type X100 and type X220. Each crude oil differs not only in cost per barrel, but in composi-tion as well. The following table indicates the percentage of crucial ingredients found in each of the crude oils and the cost per barrel for each: Major oil refineries all use LP for blending crude oils to produce gasoline grades. CRUDE OIL TYPEINGREDIENT A (%)INGREDIENT B (%)COST/BARREL ($) X 100 35 55 30.00 X 220 60 25 34.80 Weekly demand for the regular grade of Low Knock gasoline is at least 25,000 barrels, anddemand for the economy is at least 32,000 barrels per week. At least 45% of each barrel of regu-lar must be ingredient A. At most 50% of each barrel of economy should contain ingredient B.While the gasoline yield from one barrel of crude depends on the type of crude and the type of processing used, we will assume for the sake of this example that one barrel of crude oil willyield one barrel of gasoline.The Low Knock management must decide how many barrels of each type of crude oil tobuy each week for blending to satisfy demand at minimum cost. In modeling this as a linear pro-gram, the objective is to minimize cost. Each of the two types of gasoline has a demand con-straint, and each of the two types of gasoline has a constraint restricting the amount of theingredients. Thus, there are four constraints. The decisions involve the amount of each type of crude to use in each type of gasoline, so these will be the decision variables. Since normally one barrel of crude oil only yield about 0.46 barrel of gasoline, please adjust your constraints for the demands accordingly to make your analysis more practical. Then, answer the following questions.

Question 1 of 3 3.0 Points At the optimal production, does the company just make enough regular gasoline to meet the demand? Does the company just make enough economy gasoline to meet the demand? A. Yes, yes B. Yes, no C. No, yes D. No, no

Reference no: EM13318011

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