World Oil Company can buy two types of crude oil: light oil at a cost of $25 per barrel, and heavy oil at $22 per barrel. Each barrel of crude oil, when refined, yields three products: gasoline, jet fuel, and kerosene. The following table indicates the quantities in barrels of gasoline, jet fuel, and kerosene produced per barrel of each type of crude oil: Gasoline Jet Fuel Kerosene Light Crude 0.45 0.18 0.30 Heavy Crude 0.35 0.36 0.20 The refinery has contracts to deliver 1,260,000 barrels of gasoline, 900,000 barrels of jet fuel, and 300,00 barrels of kerosene. Build a model and solve the problem using an Excel solver. What is the minimum cost of crude oil to satisfy the contracts? For World Oil, in the optimal solution, how many barrels of Kerosene in excess of the contracted amount is available for sale on the open market?

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To solve this problem using Excel Solver we can set up a linear programming model Lets define the decision variables as follows x barrels of light cru... View the full answer