SMM$346$ Supply Chain AnalyticsCoursework Part A: Kangaroo Oil Company: Far Eastern Operations$1$Introduction The objective of this case is to develop skills to apply optimization models to support business decisions. In particular, you will get experience in formulating LP models, solving them with Excel, interpreting the computer outputs and developing policy implications.The Kangaroo Oil Company is an international producer, refiner, transporter, and wholesale distributor of oil, gasoline, and other petroleum products to a few major clients through long $-$ term contracts. Based in Canberra, Australia, Kangaroo Oil is a holding company with several subsidiary companies operating worldwide. A major problem for Kangaroo today is to coordinate the actions of these various subsidiaries into an executable action plan while maintaining reasonable levels of autonomy at the subsidiary companies. To date, an annual corporate plan that details the pattern of refinery productions and shipments has been developed. This plan provides general guidelines and the plan can be revised periodically to reflect major changing conditions. This corporate plan was originally done on a trial and error basis, but Tony DAmato and his strategic operations planning $($SOP$)$ group have decided to hire a consultancy company to design and implement an optimal production and distribution plan. The project manager of the consultants, Ms$.$ Christina Pagniacci, came up with the idea of designing an integrated planning model aided by linear programming. You and your group member$($s$)$ were hired as associates to help Ms$.$ Pagniacci develop and implement this approach for $2015.$ Using linear programming, you will develop an annual plan that determines the sourcing and production strategy, along with an appropriate distribution strategy to minimize all relevant costs. Far Eastern OperationsAs of December $2014,$ there are two major sources of crude oil with whom Kangaroo Oil has signed forward contracts: the Abadan oil fields in Iran and the Brunei oil fields in Borneo. Iranian crude oil is relatively heavier $(24\backslash$deg API$),$ and Kangaroo could obtain as much as $275,000$ barrels per year at a cost of $$47$ per barrel at Abadan in $2015.$ A second source of crude is the Brunei fields. This is a lighter crude oil $(36\backslash$deg API$).$ Under the forward contract with the local oil authority, Walla Walla, up to $300,000$ barrels of Brunei crude can be supplied to Kangaroo at a cost of $$42$ per barrel during $2015.$ The density of crude oil affects the yields for gasoline and distillate. In general, lighter crude oil produces more gasoline, but less distillate per barrel.Kangaroo Oil owns two refinery facilities in the Far Eastern markets. The first is in Australia, operating a refinery in Sydney with a capacity of $350,000$ barrels per year. The company also markets its products throughout Australia $($shipped to a distribution center in Sydney$)$: any surplus of refined products is available for shipment to other markets. $1$ Source: Laurie Morgan and Suleyman