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Bay Oil produces two types of fuels (regular and super) by mixing three ingredients. The major distinguishing feature of the two products is the octane
Bay Oil produces two types of fuels (regular and super) by mixing three ingredients. The major distinguishing feature of the two products is the octane level required. Regular fuel must have a minimum octane level of 90 while super must have a level of at least 100. The cost per barrel, octane levels, and available amounts (in barrels) for the upcoming two-week period are shown in the following table. Likewise, the maximum demand for each end product and the revenue generated per barrel are shown.
Input Cost/Barrel Octane Available (barrels) $16.50 100 110,000 $14.00 87 350,000 $17.50 110 300.000 Revenue/Barrel Max Demand (barrels) Regular $18.50 350,000 Super $20.00 500,000Step by Step Solution
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