As we have formulated Chandler’s blending model, a barrel of any input results in a barrel of output. However, in a real blending problem, there can be losses.

Suppose a barrel of input results in only a fraction of a barrel of output. Specifically, each barrel of either crude oil used for gasoline results in only 0.95 barrel of gasoline, and each barrel of either crude used for heating oil results in only 0.97 barrel of heating oil. Modify the model to incorporate these losses, and reoptimize.

Skill-Extending Problem