Online Quiz 1A, INDE6372
Sept., 21, 2023 (Thursday): 8:00-9:30PM
Question 1:
Chandler Oil Company has 5,000 barrels of oil 1 and 10,000 barrels
of oil 2. The company sells two products: gasoline and heating oil. Both
products are produced by
combining oil 1 and oil 2. The quality level of each oil is as follows: oil 1: 10;
oil 2: 5. Gasoline must have an average quality level of at least 8, and
heating oil at least 6. Demand for each product must be created by
advertising. Each dollar spent advertising gasoline creates 5 barrels of
demand and each spent on heating oil creates 10 barrels of demand.
Gasoline is sold for $25 per barrel, heating oil for $20. Formulate an LP to
help Chandler maximize profit.
Assume that no oil of either type can be purchased.
Sample solution: Let
xij = barrels of oil i used to make product j (j = 1 is
gasoline and j = 2 is
heating oil)
ai = dollars spent advertising product i
max z = 25(x11 + x21) + 20(x12 + x22) - a1 - a2
s.t.
x11 + x21 = 5a1,
x12 + x22 = 10a2, Demand constraints
2x11 - 3x21
0;
4x12 - x22
0; Composition constraints
x11 + x12
5000; x21 + x22
10,000;
Constraints on crude oil;
All variables
0