An oil company has to transport oil products from three sites (S1, S2, S3), through two refineries
Question:
An oil company has to transport oil products from three sites (S1, S2, S3), through two refineries (R1, R2) and finally to three markets (C1, C2, C3). The supply(in 1,000 barrels per day) are given in Table 1.
Table 1. (Site supply)
Site Supply
S1 1,500
S2 750
S3 1,200
Table 2 below shows the costs in $1,000 of transporting 1,000 barrels of crude oil between sites and refineries. It also has the costs of refining 1,000 barrels of crude oil at each refinery, and maximum capacities (in 1,000 barrels per day) of each refinery. Table 3 below shows the costs in $1,000 of transporting 1,000 barrels of refined fuel between refineries and customers. It also gives customer demands (in 1,000 barrels per day).
a) Given that all customer demands must be fulfilled, while trying to maintain costs at the lowest possible level, formulate the adequate model to solve the problem.
Table 2. Site to refinery costs, refinery costs, and refinery capacities
From/to R1 R2
S1 20 7
S2 12 10
S3 15 8
Refining Costs 7 6
Capacity 1000 1200
Table 3. Refinery to customer costs and customer demands
From/to C1 C2 C3
R1 6 8 5
R2 4 10 7
Demand 500 800 900
Note: Assume there is no waste in the refining process, so that the same quantity that enters goes out.
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe