Reference no: EM13781671

The Low Knock Oil Company produces two grades of cut-rate gasoline for industrial distribution. The grades, regular and economy, are produced by refining a blend of two types of crude oil, type X100 and type X220. Each crude oil differs not only in cost per barrel, but in composition 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: CRUDE OIL TYPE INGREDIENT A (%) INGREDIENT B (%) COST/BARREL ($) X100 35 55 30.00 X220 60 25 34.80 Weekly demand for the regular grade of Low Knock gasoline is at least 25,000 barrels, and demand for the economy is at least 32,000 barrels per week. At least 45% of each barrel of regular 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 will yield 0.46 barrel of gasoline.

Question 1 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

Question 2 To minimize the production cost, the optimal amount of X100 crude oil used in producing regular gasoline is barrels, and the optimal amount of X220 crude oil used in producing regular gasoline is barrel. (Please round to the closest integer and include no units.)

Question 3 To minimize the production cost, the optimal amount of X100 crude oil used in producing economy gasoline is barrels, and the optimal amount of X220 crude oil used in producing economy gasoline is barrel. (Please round to the closest integer and include no units.)