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Chandler Oil Company has 5 0 0 0 barrels of oil 1 and 1 0 0 0 0 barrels of oil 2 . The company

Chandler Oil Company has 5000 barrels of oil1 and 10000barrels of oil2. The company sells two
products gasoline and hea>ng oil. Both the products are produced by combining oil 1 and oil 2.
The quality level of the inputs or ingredients are different; the quality level of oil1 is 10; the
quality level of oil2 is 5. Gasoline must have an average quality of level of at least 8, and hea>ng
oil must have a quality level of at least 6. Demand for each product is created by adver>sement.
Each dollar spent adver>sing gasoline creates a demand of 5 barrels for gasoline; each dollar
spent adver>sing hea>ng oil creates a demand of 5 barrels for hea>ng oil. Gasoline is sold for
$25 per barrel, and hea>ng oil is sold for $20 per barrel. Formulate and LP to help Chandler
maximize profit. Assume that addi>onal amounts of oil1 or oil2 cannot be purchased.
(Hint the quality level of the products would be calculated by taking the weighted average of the
quality of the input oils)

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