Your company produces three grades of gasolines for industrial distribution. The three grades- premium, regular and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Your company produces three grades of gasolines for industrial distribution. The three grades- premium, regular and economy-are produced by refining a blend of three types of crude oil: Brent, Dubai and WTI. Each crude oil differs not only in cost per barrel, but in its composition as well. Table 1 below indicates the percentage of three crucial compounds found in each of the crude oils, the cost per barrel for each, and the maximum weekly availability of each. Table 1: Ingredient Data Crude Compound A Oil Type Brent Dubai WTI (%) 35 50 60 Compound B Compound C Cost/Barrel (%) (%) 25 35 30 20 Table 2: Gasoline Data Gasoline Type Premium Regular Economy Compound A Table 2 indicates the weekly demand for each grade of gasoline and the specific conditions on the amounts of the different compounds that each grade of gasoline should contain. The table shows, for example, that in order for gasoline to be classified as premium grade, it must contain at least 55% of compound A, no more than 23% of compound B and no restrictions on compound C. Your company must decide how many barrels of each type of crude oil to buy each week for blending to satisfy demand at minimum cost. > 55% 15 15 ≥ 40% (S) 86 92 95 ≤ 23% ≥ 25% Compound B Compound C Demand (barrels) 14,000 Availability (barrels) 15,000 32,000 24,000 ≤ 35% ≤ 25% a. Which constraint(s) should you remove from your LP in QI? b. Set up the corresponding LP in Excel and run Solver. 22,000 25,000 1. Write down the linear program to determine the optimal blending plan. (8 marks) 2. Set up the Excel spreadsheet and use Solver to compute the optimal plan. Interpret your Solver's answer report. (8 marks) 3. Your company finds a new crude oil supplier who can sell you unlimited Brent oil at current cost. (2 marks) (2 marks) Your company produces three grades of gasolines for industrial distribution. The three grades- premium, regular and economy-are produced by refining a blend of three types of crude oil: Brent, Dubai and WTI. Each crude oil differs not only in cost per barrel, but in its composition as well. Table 1 below indicates the percentage of three crucial compounds found in each of the crude oils, the cost per barrel for each, and the maximum weekly availability of each. Table 1: Ingredient Data Crude Compound A Oil Type Brent Dubai WTI (%) 35 50 60 Compound B Compound C Cost/Barrel (%) (%) 25 35 30 20 Table 2: Gasoline Data Gasoline Type Premium Regular Economy Compound A Table 2 indicates the weekly demand for each grade of gasoline and the specific conditions on the amounts of the different compounds that each grade of gasoline should contain. The table shows, for example, that in order for gasoline to be classified as premium grade, it must contain at least 55% of compound A, no more than 23% of compound B and no restrictions on compound C. Your company must decide how many barrels of each type of crude oil to buy each week for blending to satisfy demand at minimum cost. > 55% 15 15 ≥ 40% (S) 86 92 95 ≤ 23% ≥ 25% Compound B Compound C Demand (barrels) 14,000 Availability (barrels) 15,000 32,000 24,000 ≤ 35% ≤ 25% a. Which constraint(s) should you remove from your LP in QI? b. Set up the corresponding LP in Excel and run Solver. 22,000 25,000 1. Write down the linear program to determine the optimal blending plan. (8 marks) 2. Set up the Excel spreadsheet and use Solver to compute the optimal plan. Interpret your Solver's answer report. (8 marks) 3. Your company finds a new crude oil supplier who can sell you unlimited Brent oil at current cost. (2 marks) (2 marks)
Expert Answer:
Answer rating: 100% (QA)
Write down the linear program to determine the optimal blending plan Miimize 86x1 15x2 24x3 Subject ... View the full answer
Related Book For
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina
Posted Date:
Students also viewed these physics questions
-
The Low Knock Oil Company produces two grades of cut-rate gasoline for industrial distribution. The grades, regular and economy, are produced by refining a blend of two types of crude oil, type X100...
-
Raptor Fuels produces three grades of gasoline Regular, Premium, and Super. All of these are produced by blending two types of crude oil Crude A and Crude B. The two types of crude contain specific...
-
OILCO produces three grades of gasoline (regular, premium, and super) by blending three types of crude oil. All three types of crude oil contain two important ingredients (X and Y) required to...
-
Let Z[] be the following set of rational numbers { a Z, k N} (and recall that N = {0, 1, 2,...} in this class). Let the addition and multiplication for Z[] be the usual addition and multiplication...
-
What factors should be considered when selecting a site for a new manufacturing facility?
-
BuyCo holds 25 percent of the outstanding shares of Marqueen and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment...
-
Question: Union workers are striking at Cheesey, a restaurant, forming picket lines in front of the restaurant during the lunch and dinner hours but at no other times. The union members chant slogans...
-
Gordon Beckham started his own delivery service, Beckham Deliveries, on June 1, 2012. The following transactions occurred during the month of June. June 1 Gordon invested $10,000 cash in the...
-
With only a part-time job and the need for a professionalwardrobe, Rachel quickly maxed out her credit card this summerafter graduation. She would like to pay down her $8,000 outstandingbalance in 2...
-
Cheek Products, Inc. (CPI) was founded 53 years ago by Joe Cheek and originally sold snack foods such as potato chips and pretzels. Through acquisitions, the company has grown into a conglomerate...
-
Complete a closing trial balance, recording the following activities and transactions within the trial balance provided which has the beginning trial balance for the company. Cash 500,000 Accounts...
-
Consider the two circuit diagrams below. These two circuits are equivalent in function but are drawn to appear differently. In circuit diagram 1, nodes a through f are labelled. Redraw circuit...
-
Boat Ltd . has a major asset that has just been purchased and has been segregated into the following significant components made up of spare parts and major inspections. Component D consists of a...
-
Could you elaborate on the concept of cultural humility as a guiding principle for fostering respectful and reciprocal interactions across diverse cultural contexts, and how might the cultivation of...
-
What is the administration and planning of business operations used to produce goods and services as efficiently as possible?
-
What impression does the Chronicle give of the Mongols in Russia and how does that compare and contrast with the impression given by Marco Polo of the Mongols in China? How did the Russian writer...
-
States of Consciousness Do Nothing Directions: Watch this YouTube video, "What is consciousness?" posted by TedEd. Use the questions below to process the information shared. You can access the video...
-
Suppose the concentration of glucose inside a cell is 0.1 mm and the cell is suspended in a glucose solution of 0.01 mm. a. What would be the free energy change involved in transporting 10-o mole of...
-
A chart of accounts varies with each type of business as well as each company. In a group, compare and contrast the accounts that would appear in Coles Real Estate Office, Sarahs Clothing Emporium,...
-
Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firms worksheet for the year ended December 31,...
-
In what order do accounts appear in the chart of accounts?
-
On 31 October 2004, its balance sheet date, Sons and Daughters Ltd had issued share capital of 600,000 ordinary 1 shares and reserves of 340,000. Four years later, the share capital is unchanged but...
-
On 31 March 2003, Son Ltd had issued share capital of 75,000 ordinary 1 shares and reserves of 40,000. Two years later, the reserves had risen to 60,000 but the share capital was unchanged. Pa Ltd...
-
Are the GAAS audit standards designed to catch fraud other than financial statement fraud? What is the expectation gap? Did SAS No. 99 close it?
Study smarter with the SolutionInn App