Question

Problem 4 (15 Points) An oil refining company can purchase crude oil from 2 countries: Kuwait and Canada. One barrel of crude oil yields useable gasoline, jet fuel, and lubricant, in barrels, according to the following table (there is a 10% loss due to waste in the refining process): Product Yield (in barrels) Kuwait Canada 0.3 0.4 0.2 0.4 0.2 0.3 Gasoline Jet Fuel Lubricant Kuwait can offer up to 9000 barrels of crude oil at a cost of $20 per barrel, while Canada can offer up to 6000 barrels of crude oil at a cost of S15 per barrel. To keep up with demand, this company must produce 2000 barrels of gasoline, 1500 barrels of jet fuel, and 500 barrels of lubricant. Answer using any approach you like, just make sure to write a thorough mathematical formulation. 4.1 If the company purchases 100% of crude oil from Kuwait to meet the minimum business requirements, what cost does the company incur? 4.2 If the company wishes to minimize cost, how much crude oil should they purchase fronm each country?

Answer 1

03 o- 4 0.3 kuwait can offu utta 9。00 banula 3 uuda el 1000 barnds a ceat Lanada can off ut 6ooo banal at a ust 4.1 a n aseline ISbarrl land Soo barul usri cant fone kuwait nen we have χ 9000 -

0.3 IS๐๐๐ = 3750 tence to met 3 ㄋ 3 Company wanto to minmi2e Cost Lat tompany Lu ane em Canada The we have 6。00

,7500 (o, Sv o, 14 ene boundavy pous 2D (700 o) 2 15(a) + 1800。0 = 2

home wimum value cccurs at (2000, 375) 6250 Hinu nunimum ost ,.. 0"7.shoul kuwait and 375o sans po ana Cew Canada