ENGM 607 - Case Study THE BARROTT COMPANY CRUDE (HPI, LPI) REFINED (GAS, DISTILLATE) $$ - CRUDE, TRANSPORT, REFINING QUANTITY OF GAS AND DISTILLATE SA $$ - TRANSPORT NZ US DISTILLATE TANKER USAGE JTable C1: 2202 Demand (1000's of Barrels/Day AREA Gasoline Distillate Australia 9.0 21.0 Japan 3.0 12.0 Philippines 5.0 8.0 New Zealand 5.4 B.7 Table C2: Refinery Operations Australia Japaan Capacity (Barrel/Day Output 50,000 30,000 Saudi Crude Transportation Cxost ($/Barrel) $1.30 $1,40 High Process Intensity ($/Barrel) $2.40 $2,50 yield of Gasoline 0.31 0.3 yield of Distillate 0.61 0.62 Low Process Intensity ($/Barrel) $1.80 $1,78 yield of Gasoline 0.19 0,18 Yield of Distillate 0.73 0.74 Brunei Crude Transportation Cxost ($/Barrel) $0.30 $0.50 High Process Intensity ($/Barrel) $1.87 $1.85 yield of Gasoline 0.36 0.35 Yield of Distillate 0.58 0.59 Low Process Intensity ($/Barrel) $1,20 $1.10 yield of Gasoline 0.26 0.25 Yield of Distillate 0.69 0.70 Variable costs of supplying gasoline or distillate to New Zealand and the Philippines are: Table C3: Variable Costs of Shipment of Gasoline/Distillate in $/Barrel FROM: TO: New Zealand Philippines Australia $0.40 $0.60 Japan $0.50 $0.80 Tankers are used to bring crude from Saudi Arabia and Borneo to Australia and Japan and to transport refined products from Australia and Japan to the Philippines and New Zealand. However, there is a limited capacity of tankers available. The fleet has a capacity of 6.5equivalent (standard sized) tankers. The amount of capacity needed to deliver one barrel from one destination to another depends upon the distance traveled, port time, and other factors. The table below lists the fraction of one standard sized tanker needed to deliver 1,000 b/d over the indicated routes. In order to meet the demand, it is also possible to charter independent tankers. The rate for this is $10,800 per day for a standard sized tanker. United States Supply United States operations on the West Coast expect a surplus of 12,000 b/d of distillate during 2022. The cost of distillate at the loading port of Los Angeles is $130.00 per barrel. There is no excess gasoline capacity. The estimated variable shipping costs and tanker requirements of distillate shipments from the United States are: Variable Costs of Fraction of Table C5: United States Shipments Shipments in Tanker for 1000 to: $/Barrel Barrels/Day New Zealand $2.80 0.18 Philippines $2.20 0.15 PART 1: Formulate a linear program that can be used to generate a comprehensive plan for the whole Far Eastern operations. Clearly define every variable used in your formulation. PART 2: Solve your linear program. How many barrels of crude should BARROTT purchase from Saudi Arabia for its Far Eastern operations? How much crude should be refined in Australia? How much in Japan? Provide tables showing the quantities of gasoline and distillate shipped from each of the two refineries and from the U.S. to each of the four market areas. Table C4: Tanker Usage Factors (Fraction of Standard Sized Tanker Needed to Deliver 1000 Barrels/Day) BETWEEN AND Australia Japan Saudi Arabia 0,12 0.11 Borneo 0.05 0.05 Philippines 0.02 0.01 New Zealand 0.01 0.06THE BARROTT COMPANY HPI: High Process Intensity LPI: Low Process Intensity Saudi Arabia Brunei HPI LPI HPI LPI CRUDE Australia CE 50000 Australia Japan 30000 Japan = 60000 40000 Saudi Brunei Cost of barrel of crude + $113.70 $113.10 $122.17 $121.50 transport + refining $113.90 $113.18 ! $122.35 $121.60 GAS Australia 0.31 0.19 D.36 0.26 tele 15500 Japan 0.30 0.18 0.35 0.25 6500 These numbers are not a part of the model or the solution. The actual values will be determined by the results of the remaining calculations. This allows you to complete and have a solution to the first portion of the problem. DISTILLATE Australia 0.61 0.73 0.58 0.69 30500 Japan 0.62 0.74 0.59 0.70 18500 Saudi Arabia Brunei Crude $110.00 $110.00 $120.00 $120.00 $/barrel $110.00 $110.00 | $120.00 $120.00 Saudi Arabia Brunei Crude Australia $1.30 $1.30 $0.30 $0.30 $/barrel/transport Japan $1.40 $1.40 $0.50 $0.50 Saudi Arabia Brunei Crude Australia $2.40 $1.80 $1.87 $1.20 $/barrel/refine Japan $2.50 $1.78 $1.85 $1.1011/22/2022 THE BARROTT COMPANY HPI: High Process Intensity LPI: Low Process Intensity Saudi Arabia Brunei HP LPI HPI LP CRUDE Australia 50000 Australia Japan 30000 Japan 60000 40000 !pneg Brunei Cost of barrel of crude + $113. 70 $113. 10 ! $122.17 $121.50 transport + refining $113.90 $ 113.18 $122.35 $121.60 Aust. Japan NZ Phil GAS Australia 0.31 1.19 0.36 0.26 > = Japan 0.30 D. 18 0.35 0.25 9000 3000 5400 5000 Aust. Japan Phil DISTILLATE Australia 0.61 0.73 0.58 0.69 Japan 0.62 0.74 0.59 0.70 U.S. Vest Coast 12000 )= )= Saudi Arabia Brunei 21000 12000 8700 8000 Crude $110.00 $110.00 | $120.00 $120.00 $/barrel $110.00 $110.00 ! $120.00 $120.00 Saudi Arabia Brunei Crude Australia $1.30 $1.30 $0.30 $0.30 $/barrel/transport Japan $1.40 $1.40 $0.50 $0.50 Saudi Arabia Brunei Crude Australia $2.40 $1.80 $1.87 $1.20 $/barrel/refine Japan $2.50 $1.78 $1.85 $1. 10