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Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown in the file P05_74.xlsx (See Below). a.  Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0". (See Photo)     P05_74.xlsx Ewing Oil data                     Unit shipping costs (per 1000 barrels)           To           Dallas Houston New York Chicago From Los Angeles $3,250 $3,300       San Diego $3,400 $3,350       Dallas     $3,600 $3,100   Houston     $3,550 $3,200

Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown in the file P05_74.xlsx (See Below). a.  Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0". (See Photo)     P05_74.xlsx Ewing Oil data                     Unit shipping costs (per 1000 barrels)           To           Dallas Houston New York Chicago From Los Angeles $3,250 $3,300       San Diego $3,400 $3,350       Dallas     $3,600 $3,100   Houston     $3,550 $3,200

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown in the file P05_74.xlsx (See Below).

a.  Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0".

(See Photo)

 

 

P05_74.xlsx

Ewing Oil data        
           
Unit shipping costs (per 1000 barrels)      
    To      
    Dallas Houston New York Chicago
From Los Angeles $3,250 $3,300    
  San Diego $3,400 $3,350    
  Dallas     $3,600 $3,100
  Houston     $3,550 $3,200
Flows (in 1,000s of barrels) To San Dallas Houston LA Diego Dallas Houston Refined Refined NY Chicago From LA 600 San Diego 400 Dallas Houston 90 Dallas Refined Houston 600 90 Refined b. If each refinery had a capacity of 380,000 barrels per day, by how much would the total cost to the company change? Total Cost: $ 8,699,00
Transcribed Image Text:Flows (in 1,000s of barrels) To San Dallas Houston LA Diego Dallas Houston Refined Refined NY Chicago From LA 600 San Diego 400 Dallas Houston 90 Dallas Refined Houston 600 90 Refined b. If each refinery had a capacity of 380,000 barrels per day, by how much would the total cost to the company change? Total Cost: $ 8,699,00
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