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A refinery utilises two types of crude oils (Crude 1 and Crude 2) to produce gasoline, kerosene and fuel oil. The refinery purchases the crude
A refinery utilises two types of crude oils (Crude 1 and Crude 2) to produce gasoline, kerosene and fuel oil. The refinery purchases the crude from upstream suppliers and pays $30/bbl and $25/bbl for Crude 1 and Crude 2 respectively. The processing costs for Crude 1 and Crude 2 are $0.68/bbl and $0.22/bbl respectively. Table 1 shows the characteristics and limitations for the various products. What is the maximum profit that the refinery can obtain and how much of each crude oil is required? Comment on your findings. (Formulate and solve using linear programming) Table 1: Product Requirements Maximum allowable Product Volume percent yield (%) daily production Price ($/bbl) (bbl) Crude 1 Crude 2 Gasoline 70 31 6000 36 Kerosene 6 9 2400 24 Fuel Oil 24 60 12000 21
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