Bruce McDaniel is a gas trader for old dominion energy Inc. The network in The figure below represents a portion of The gas pipe line where ODE does business. The values next to each arc in this network are of the form (x,y) where X is the cost per thousand cubic feet of transportation in gas along the arc and Y is the variable transmission capacity of the arc in thousands of cubic feet. Note that the arts in this network are bidirectional (for example gas can flow in either direction at the prices and capacities listed.)

Bruce currently has 100,000 cubic feet of gas in storage at Katy. Industrial customers in Joliet are offering $4.35 per thousand cubic feet for up to 35,000 cubic feet of gas. Buyers in Leidy are offering $4.63 per thousand cubic feet for up to 60,000 cubic feet of gas.

Create a spreadsheet model to help Bruce answer the following questions.

1.) Given the available capacity in the network, how much gas can be shipped from Katy to Leidy? From Katy to Joliet?

2.)How much gas should Bruce offer to sell to Joliet and Leidy if he wants to maximize profits?

3.) Is Bruce able to meet all the demand for both customers? if not, why not?

4.) If Bruce wanted to try to pay more to obtain additional capacity on some of the pipelines, which one should he investigate and why?
 

Transcribed Image Text:

U.S. Express is an overnight package delivery company based in Atlanta, Georgia. Jet 242 Chapter 5 Network Modeling (.53, 25) Maumee 10 Leidy 11 (.52, 25) Joliet (.45, 20) (.33, 15) (28, 15) (.47, 30) (47, 25) Lebanon 9. (.22, 15) Kiowa 6. (.35, 15) (.48, 20) (28, 20) Carthage 4. (.52, 15) (35, 25) (.30, 30) Perryville 7. Waha 2 (42,30) (.51, 15) (.32, 20) Henry (.21, 10) Katy (.39, 15) Wharton 1. (.28, 20) Index: (cost, capacityl 1 U.S. Express fuel is one of the largest operating costs incurred bu tho d the company U.S. Express is an overnight package delivery company based in Atlanta, Georgia. Jet 242 Chapter 5 Network Modeling (.53, 25) Maumee 10 Leidy 11 (.52, 25) Joliet (.45, 20) (.33, 15) (28, 15) (.47, 30) (47, 25) Lebanon 9. (.22, 15) Kiowa 6. (.35, 15) (.48, 20) (28, 20) Carthage 4. (.52, 15) (35, 25) (.30, 30) Perryville 7. Waha 2 (42,30) (.51, 15) (.32, 20) Henry (.21, 10) Katy (.39, 15) Wharton 1. (.28, 20) Index: (cost, capacityl 1 U.S. Express fuel is one of the largest operating costs incurred bu tho d the company

Answer rating: 100% (QA)

1 Since all the storage points can be accessed through the network from Katy to Leidy the total avai... View the full answer