Question
A corporation that produces gasoline and oil specialty additives purchases four grades of petroleum distillates, A, B, C, and D. The company then combines
A corporation that produces gasoline and oil specialty additives purchases four grades of petroleum distillates, A, B, C, and D. The company then combines the four distillates to make three mixtures (Deluxe, Standard, and Economy) according to specifications of the maximum and/or minimum percentages of grades A, C, or D in each blend, given in Table 1. Max % allowed for Additive D 20% 10% 60% 25% 50% 45% Table 1: Specifications of the three mixtures. Mixture Deluxe Standard Economy Max % allowed for Additive A 60% 15% Min % allowed for Additive C Max quantity available Supplies of the three basic additives and their costs are given in Table 2. Distillate per day (gals) 4000 Cost $/gallon 0.60 0.52 0.48 0.35 Selling price $/gallon A B 5000 C 3500 D 5500 Table 2: Supplies and costs of petroleum grades. 7.9 6.9 5.0 Formulate a linear program to determine the production policy that maximizes profits. Clearly define your decision variables, objective function and constraints. Solve the model with Gams.
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