Question 2 PETRINIDAD, an oil refinery, refines crude oil into petrol. The refinery uses two types of crude oil, heavy and light which is blended together to form either super or premium petrol. The refining process uses 7g of heavy crude oil and 5g of light crude oil to make one gallon of super petrol. Conversely, 5g of heavy crude oil and 7g of light crude oil is used to make one gallon of premium petrol. The refinery is constrained to production of 5000g of heavy crude oil and 6000g of light crude oil daily and at least two thirds of the petrol produced should be super. The company wishes to maximise its total profit given profitability of $0.25 per gallon for super and $0.10 per gallon for premium. 1. Find a. the objective function and the three constraints for the information stated above.

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Quantitative Methods II - Question 2

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Question 2
PETRINIDAD, an oil refinery, refines crude oil into petrol. The refinery uses two types of crude
oil, heavy and light which is blended together to form either super or premium petrol.
The refining process uses 7g of heavy crude oil and 5g of light crude oil to make one gallon of
super petrol. Conversely, 5g of heavy crude oil and 7g of light crude oil is used to make one gallon
of premium petrol.
The refinery is constrained to production of 5000g of heavy crude oil and 6000g of light crude oil
daily and at least two thirds of the petrol produced should be super. The company wishes to
maximise its total profit given profitability of $0.25 per gallon for super and $0.10 per gallon for
premium.
1. Find
a. the objective function and the three constraints for the information stated above.
From MS Excel Solver, using either the Answer or Sensitivity Report state:
b. the optimal production levels of super and premium petrol and the allowable ranges.
c. the maximum profit can will be made.
2. Given an additional unit of production what will the increase in profit for premium petrol.
(ATTACH YOUR ANSWER REPORT AND SENSITIVITY REPORT TO YOUR
SOLUTION)
Transcribed Image Text:Question 2 PETRINIDAD, an oil refinery, refines crude oil into petrol. The refinery uses two types of crude oil, heavy and light which is blended together to form either super or premium petrol. The refining process uses 7g of heavy crude oil and 5g of light crude oil to make one gallon of super petrol. Conversely, 5g of heavy crude oil and 7g of light crude oil is used to make one gallon of premium petrol. The refinery is constrained to production of 5000g of heavy crude oil and 6000g of light crude oil daily and at least two thirds of the petrol produced should be super. The company wishes to maximise its total profit given profitability of $0.25 per gallon for super and $0.10 per gallon for premium. 1. Find a. the objective function and the three constraints for the information stated above. From MS Excel Solver, using either the Answer or Sensitivity Report state: b. the optimal production levels of super and premium petrol and the allowable ranges. c. the maximum profit can will be made. 2. Given an additional unit of production what will the increase in profit for premium petrol. (ATTACH YOUR ANSWER REPORT AND SENSITIVITY REPORT TO YOUR SOLUTION)
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