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Question:

Build a chart exploring what prices to set for all combinations of the following scenarios: The price per barrel of crude oil is $60, $80, and $90 per barrel. The desired margin is 10% and 20%. Additionally, if the desired markup is 10% and 30%. Please indicate in your chart your initial finding for total cost per litre in the chart.

Case:

Naziha buyers. MesoPetrolia Murad ran the 7th largest refinery in the Majnoon oil fields of Iraq. The refinery was a division of MesoPetrolia, who removes crude oil from the land through their Extraction Division, and refines and sells products through Murad's Division ( Refinery Division), and sells to internal and external buyers. An example of an internal buyer was the Commercial Asphalt Division. Murad's Refinery Division can purchase crude oil from the in- house Extraction Division or third -party sellers in the region, the same way they can sell to internal or external Refining oil involves heating the crude oil to separate out components based on their boiling points, see Exhibit 1 for more information on oil refinement. Murad's Refining Division heats and separates the crude oil. Then they can sell the petroleum products to various distributors such as gas stations, jet fuel firms, and asphalt producers. In 50% of crude oil becomes gasoline, 30% becomes jet fuel, and 20% goes into asphalt production. Murad's refining facility typically processes 1 million crude oil barrels per year1. Jet Fuel Question 1. Jet Fuel (Continued) Murad's Division, barrels into the refinery process and allocates these direct labour costs proportionally to product outcome. The The production process uses little direct labour, but Murad attributes $5 million of direct labour per year to the barrel loaders who empty crude oil total overhead cost of operating the refinery is $80 million per year which also would be distributed proportionally to product outcomes. MesoPetrolia sells jet fuel directly to Erbil International Airport's fuel service business. This fuel was to be sold to various airlines and local pilots. Given demand in the market, Murad feels they could price the fuel using total cost + pricing. Build a chart exploring what prices to set for all combinations of the following scenarios: The price per barrel of crude oil is $60, $80, and $90 per barrel. The desired margin is 10% and 20%. Additionally, if the desired markup is 10% and 30%. Please indicate in your chart your initial finding for total cost per litre in the chart.