Texxon Oil Distributors, Inc., has three active oil wells in a west Texas oil field. Well, 1
Question:
Texxon Oil Distributors, Inc., has three active oil wells in a west Texas oil field. Well, 1 has a capacity of 93 thousand barrels per day (TBD), Well 2 can produce 88 TBD, and Well 3 can produce 95 TBD. The company has five refineries along the Gulf Coast, all of which have been operating at stable demand levels. In addition, three pump stations have been built to move the oil along the pipelines from the wells to the refineries. Oil can flow from any one of the wells to any of the pump stations and from any one of the pump stations to any of the refineries, and Texxon is looking for a minimum-cost schedule. The refineries’ requirements are as follows.
Refinery | R1 | R2 | R3 | R4 | R5 |
Requirement (TBD) | 30 | 57 | 48 | 91 | 48 |
The company’s cost accounting system recognizes charges by the segment of the pipeline that is used. These daily costs are given in the tables below, in dollars per thousand barrels.
To | Pump A | Pump B | Pump C | |
From | Well 1 | 1.52 | 1.6 | 1.4 |
Well 2 | 1.7 | 1.63 | 1.55 | |
Well 3 | 1.45 | 1.57 | 1.3 |
To | R1 | R2 | R3 | R4 | R5 | |
From | Pump A | 5.15 | 5.69 | 6.13 | 5.63 | 5.8 |
Pump B | 5.12 | 5.47 | 6.05 | 6.12 | 5.71 | |
Pump C | 5.32 | 6.16 | 6.25 | 6.17 | 5.87 |
Use the excel solver to build a model If each pump station has a capacity, and the three pump stations’ maximum flow through them are all 100 TBD per day. What is the optimal distribution plan (Hint: add a constraint to mode1 in Q1 and then use an excel solver to solve it)?
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright