Part A: Suncor Energy manufactures three types of gasoline (gas 1, gas 2, and gas 3)....
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Part A: Suncor Energy manufactures three types of gasoline (gas 1, gas 2, and gas 3). All types of gasoline are produced from a type of crude oil that is limited by 6000 barrels per day. Each barrel of gas 1 needs 0.5 barrels of crude oil. Each barrel of gas 2 needs 0.8 barrels of crude oil, and each barrel of gas 3 needs 0.5 barrels of crude oil. The whole production process costs $45, $30 and $35 per barrel for gas 1, gas2 and gas 3. The demand for gas1, gas 2 and gas 3 is 3000, 2000 and 1000 barrels per day, respectively. Notwithstanding the higher demand for gas 1, to have a consistent production, the policy of the company is to produce gas 1 at not more than 70% of the total production and to produce gas 3 at at least 20% of the total production. Additionally, for each type of gasoline, the production should not exceed the demand. The sales prices per barrel for gas 1, gas 2 and gas 3 are $70, $60, $55. Formulate the linear program for this problem and solve it in Excel. Q1. How many constraints are there in your formulation (not including non-negativity)? Q2. What percentage of the output is gas 3 in the optimal solution? Q3. What is the company's total profit at the optimal solution? Q4. How many constraints are binding in the optimal solution? Q5. How many barrels of gas 2 are produced at the optimal solution? Part B: Each dollar spent daily in advertising a particular type of gas increases the daily demand for that type of gas. Spending each dollar daily in advertising gas 1, gas 2 and gas 3 increases the demand for these gasolines by 2, 10 and 5 barrels per day. For example, if Suncor decides to spend $20 daily in advertising gas 2, then the daily demand for gas 2 will increase by 20*10-200 barrels. The company's budget for both producing and advertising gas 1, gas 2 and gas 3 is 400,000. Adjust your model to include advertising. Q6. How many variables are there in this model? Q7. What is the total amount to spend on advertising? (Keep 2 decimal places Q8. Which product received the most advertising spend? Q9. How many barrels of gas 1 are produced at the optimal solution? (Keep 2 decimal places) Q10. What is the optimal profit? (Keep 2 decimal places) Part A: Suncor Energy manufactures three types of gasoline (gas 1, gas 2, and gas 3). All types of gasoline are produced from a type of crude oil that is limited by 6000 barrels per day. Each barrel of gas 1 needs 0.5 barrels of crude oil. Each barrel of gas 2 needs 0.8 barrels of crude oil, and each barrel of gas 3 needs 0.5 barrels of crude oil. The whole production process costs $45, $30 and $35 per barrel for gas 1, gas2 and gas 3. The demand for gas1, gas 2 and gas 3 is 3000, 2000 and 1000 barrels per day, respectively. Notwithstanding the higher demand for gas 1, to have a consistent production, the policy of the company is to produce gas 1 at not more than 70% of the total production and to produce gas 3 at at least 20% of the total production. Additionally, for each type of gasoline, the production should not exceed the demand. The sales prices per barrel for gas 1, gas 2 and gas 3 are $70, $60, $55. Formulate the linear program for this problem and solve it in Excel. Q1. How many constraints are there in your formulation (not including non-negativity)? Q2. What percentage of the output is gas 3 in the optimal solution? Q3. What is the company's total profit at the optimal solution? Q4. How many constraints are binding in the optimal solution? Q5. How many barrels of gas 2 are produced at the optimal solution? Part B: Each dollar spent daily in advertising a particular type of gas increases the daily demand for that type of gas. Spending each dollar daily in advertising gas 1, gas 2 and gas 3 increases the demand for these gasolines by 2, 10 and 5 barrels per day. For example, if Suncor decides to spend $20 daily in advertising gas 2, then the daily demand for gas 2 will increase by 20*10-200 barrels. The company's budget for both producing and advertising gas 1, gas 2 and gas 3 is 400,000. Adjust your model to include advertising. Q6. How many variables are there in this model? Q7. What is the total amount to spend on advertising? (Keep 2 decimal places Q8. Which product received the most advertising spend? Q9. How many barrels of gas 1 are produced at the optimal solution? (Keep 2 decimal places) Q10. What is the optimal profit? (Keep 2 decimal places)
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