Question
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
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 and type X220. Each crude oil differs not only in cost per barrel, but in composition as well. The following table indicates the percentage of crucial ingredients found in each of the crude oils and the cost per barrel for each:
CRUDE OIL TYPEINGREDIENT A (%)INGREDIENT B (%)COST/BARREL ($)X100355530.00X220602534.80Weekly demand for the regular grade of Low Knock gasoline is at least 25,000 barrels, and demand for the economy is at least 32,000 barrels per week. At least 45% of each barrel of regular must be ingredient A. At most 50% of each barrel of economy should contain ingredient B. While the gasoline yield from one barrel of crude depends on the type of crude and the type of processing used, we will assume for the sake of this example that one barrel of crude oil will yield 0.46 barrel of gasoline.
Question 1 of 3
- At the optimal production, does the company just make enoughregulargasoline to meet the demand? Does the company just make enougheconomygasoline to meet the demand?
- A.Yes, yes
- B.Yes, no
- C.No, yes
- D.No, no
Question 2 of 3
Tominimizethe production cost, the optimal amount ofX100crude oil used in producingregulargasoline isbarrels, and the optimal amount ofX220crude oil used in producingregulargasoline isbarrel. (Please round to theclosestinteger and include no units.)
I answered 15,000 barrels of X100 for regular & 10,000 X200 for regular.
Question 3 of 3
Tominimizethe production cost, the optimal amount ofX100crude oil used in producingeconomygasoline isbarrels, and the optimal amount ofX220crude oil used in producingeconomygasoline isbarrel. (Please round to theclosestinteger and include no units.)
I answered 26,667 barrels of X100 for economy & 5,333 barrels of X220 for economy.
I read that the answer is different - Regular 32609 barrels X100 & 21739, X220; and, for economy - 57971 X100 & 11594, X220. If I'm wrong... where did I go astray?
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