Question: * Management Science * Exercise 3 A refinery produces regular gasoline, Premium gasoline, and Diesel with selling prices of USD 4 , $ 4 ,

*

Management Science

*

Exercise

3

A refinery produces regular gasoline, Premium gasoline, and Diesel with selling prices of USD

4,

4, 5,

and $

4, 1

per gallon, respectively. The company has

5, 000

gallons of crude oil and

7, 000

gallons of refined oil available to produce these fuels. In addition, the cost of each gallon of crude oil is USD

3,

and of refined oil, USD

3, 5 .

Due to quality requirements, regular gasoline must contain

40 %

of crude oil and

60 %

of refined oil; Premium gasoline must have

30 %

of crude oil and

70 %

of refined oil, and Diesel must contain

50 %

of both oils. Your task is to build an optimization model to inform how many gallons of each type of fuel to produce so that total profit is maximized.

Data:

\

table

[[,

Crude oil requirement,Refining requirement,Sales price

], [

Regular

, 40 %, 60 %,

4

*Management Science* Exercise 3 A refinery produces regular gasoline, Premium gasoline,

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