Question: **THIS SUBJECT IS MANAGEMENT SCIENCE NOT OPERATIONS MANAGEMENT** Exercise 3 A refinery produces regular gasoline, Premium gasoline, and Diesel with selling prices of USD 4,

**THIS SUBJECT IS MANAGEMENT SCIENCE NOT OPERATIONS MANAGEMENT**

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.

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