Question: 10. (20 points - Suggested statement reading time = 5 min.) This problem does NOT require the use of Excel's Solver. Kosrsky Oil (KO) has

10. (20 points - Suggested statement reading time
10. (20 points - Suggested statement reading time = 5 min.) This problem does NOT require the use of Excel's Solver. Kosrsky Oil (KO) has 2074 barrels of crude oil 1 and 5496 barrels of crude oil 2 available in its stock of the month of April 2021. The company sells gasoline and heating oil. These two products are produced by blending the two crude oils together. Each barrel of crude oil 1 has a quality level of 10 and each barrel of crude oil 2 has a quality level of 5. Quality points for the two types of crude oil are thus determined as follows: for a quantity x1 used of crude oil 1, the corresponding quality points are 10.x1 and for a quantity x2 used of crude oila, the corresponding quality points are 5.x2. Concerning the quality of the final products, gazoline must have a quality level of at least 8, whereas heating oil must have a quality level of at least 6. This means that if a quality y1 of gazoline is produced, the corresponding quality points should exceed 8.y1, and if a quality y2 of heating oil is produced, the corresponding quality points should exceed 8.y2. Please note that quality adds up in a linear way when blending the two crude oils; that is, if one blends x1 barrels of crude oil 1 and 2 barrels of crude oil 2, the blend will have 10.x1 +5.x2 quality points. Gasoline sells for 71.16 US dollars per barrel, and heating oil sells for 62.84 US dollars per barrel. We assume that demand for gasoline and heating oil is unlimited, so that all of KO's production can be sold. The company wants to maximize its April 2021 revenue from selling gazoline and heating oil. (a) (5 points - Suggested completion time = 3 min) Define clearly the decision variables of the blending problem faced by KO. (Hint: you need 4 variables!) (b) (5 points - Suggested completion time = 2 min) Express the models objective. (c) (10 points - Suggested completion time = 5 min) Express the model's constraints. (Hints: you need 4 constraints, excluding non-negativity; also, express your quality constraints in terms of points.)

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