Sunco Oil has three different processes that can beused to manufacture various types of gasoline. Eachprocess involves blending oils in the company’scatalytic cracker. Running process 1 for an hourcosts $20 and requires two barrels of crude oil 1 andthree barrels of crude oil 2. The output from runningprocess 1 for an hour is two barrels of gas 1 and onebarrel of gas 2. Running process 2 for an hour costs$30 and requires one barrel of crude 1 and three barrels of crude 2. The output from running process 2 foran hour is three barrels of gas 2. Running process 3for an hour costs $14 and requires two barrels of crude2 and three barrels of gas 2. The output from runningprocess 3 for an hour is two barrels of gas 3. Eachmonth, 4000 barrels of crude 1, at $45 per barrel,and 7000 barrels of crude 2, at $55 per barrel, can bepurchased. All gas produced can be sold at the following per-barrel prices: gas 1, $85; gas 2, $90; and gas3, $95. Determine how to maximize Sunco’s profit(revenues less costs). Assume that only 2500 hours oftime on the catalytic cracker are available each month.
Sunco Oil has three different processes that can be
used to manufacture various types of gasoline. Each
process involves blending oils in the company’s
catalytic cracker. Running process 1 for an hour
costs $20 and requires two barrels of crude oil 1 and
three barrels of crude oil 2. The output from running
process 1 for an hour is two barrels of gas 1 and one
barrel of gas 2. Running process 2 for an hour costs
$30 and requires one barrel of crude 1 and three barrels of crude 2. The output from running process 2 for
an hour is three barrels of gas 2. Running process 3
for an hour costs $14 and requires two barrels of crude
2 and three barrels of gas 2. The output from running
process 3 for an hour is two barrels of gas 3. Each
month, 4000 barrels of crude 1, at $45 per barrel,
and 7000 barrels of crude 2, at $55 per barrel, can be
purchased. All gas produced can be sold at the following per-barrel prices: gas 1, $85; gas 2, $90; and gas
3, $95. Determine how to maximize Sunco’s profit
(revenues less costs). Assume that only 2500 hours of
time on the catalytic cracker are available each month.
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