Oilco must determine how many barrels of oil to extract during each of the next 2 years.
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Oilco must determine how many barrels of oil to extract during each of the next 2 years. If Oilco extracts x1 million barrels during year 1, each barrel can be sold for 80 x1 dollars. If Oilco extracts x2 million barrels during year 2, each barrel can be sold for 85 x2 dollars. The cost of extracting x1 million barrels during year 1 is 2x1 2 million dollars, and the cost of extracting x2 million barrels during year 2 is 3x2 2 million dollars. A total of 20 million barrels of oil are available, and at most $250 million can be spent on extraction. Determine how Oilco can maximize its profit (revenues less costs) for the next 2 years.
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Related Book For
Practical Management Science, Revised
ISBN: 9781118373439
3rd Edition
Authors: Wayne L Winston, S. Christian Albright
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