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Northern Oil Company produces 2 grades of gasoline: regular and premium. The profit contributions are $0.80 per gallon for regular gasoline and $1.0 per gallon
Northern Oil Company produces 2 grades of gasoline: regular and premium. The profit contributions are $0.80 per gallon for regular gasoline and $1.0 per gallon for premium gasoline. Each gallon of regular gasoline contains 0.6 gallons of grade A crude oil and each gallon of premium gasoline contains 0.8 gallon of grade A crude oil. For the next production period, Northern has 32,000 gallons of grade A crude oil available. The refinery used to produce the gasoline has a production capacity of 48,000 gallons for the next production period. Northern Oil's distributors have indicated that demand for the premium gasoline for the next production period will be at most 50,000 gallons. a) Formulate a linear programming model that can be used to determine the number of gallons of regular gasoline and the number of gallons of premium gasoline that should be produced in order to maximize total profit contribution. b) Show all the constrain, tentative and final O.F line on a graph. c) What is the optimal solutions and optimised OF value? d) What are the values and interpretations of the slack variables (including those with 0 value)? e) What are the binding constraints
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