Question
You create your own start-up company that supply crude oil directly to a number of customers. You receive a number of tentative orders and you
You create your own start-up company that supply crude oil directly to a number of customers. You receive a number of tentative orders and you now have to tell your customers which orders you are going to take. Before embarking on this journey, you first want to allocate your production capabilities in order to devise a feasible daily production plan that maximizes your profit. There are only three different grades of crude oil that you order at this early stage of the company: Crude #1, Crude #2 and Crude #3. Each type of crude oil has to be processed, packaged and delivered. Each operation is run by yourself. Since your company only operates for 8 hours per day, the total number of available crude oil processing hours is 4, the total number of packaging hours is 2, and the total number of delivery hours is 2. Processing 10 barrels of Crude #1 requires 1 hour of time, packaging is done at the rate of 20 barrels per hour, and delivery at the rate of 30 barrels per hour. The cost of the raw materials for 1 barrel is $10, and each barrel can be sold for $70. Crude #2 takes more time to prepare: in one hour, the company can only process 5 barrels. Packaging is done at the rate of 15 barrels per hour and 15 barrels can be delivered in one hour. The cost of the raw materials for 1 barrel is $20, and it can be sold for $120. Finally, Crude #3 can be processed at the rate of 15 barrels per hour, it can be packaged at the rate of 25 barrels per hour, and delivered at the rate of 30 barrels per hour. Crude #3 is very inexpensive and one barrel only costs $5 in raw materials, and can be sold for $50. Customers expressed interest in having the following products delivered every day: 20 barrels of Crude #1, 10 barrels of Crude #2, and 30 barrels of Crude #3. Devise a feasible daily production plan that maximizes your profit by using MS Excel Solver.
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