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Olé Oil produces three products heating oil, gasoline, and jet fuel. The average octane levels must be at least 4.5 for heating oil, 8.5 for gas, and 7.0 for jet fuel. To produce these products Olé purchases two types of oil: crude 1 (at $12 per barrel) and crude 2 (at$10 per barrel). Each day, at most 10,000 barrels of each type of oil can be purchased. Before crude can be used to produce products for sale, it must be distilled. Each day, at most 15,000 barrels of oil can be distilled. It costs 10¢ to distill a barrel of oil. The result of distillation is as follows: (1) Each barrel of crude 1 yields 0.6 barrel of naphtha, 0.3 barrel of distilled 1, and 0.1 barrel of distilled 2. (2) Each barrel of crude 2 yields 0.4 barrel of naphtha, 0.2 barrel of distilled 1, and 0.4 barrel of distilled 2. Distilled naphtha can be used only to produce gasoline or jet fuel. Distilled oil can be used to produce heating oil or it can be sent through the catalytic cracker (at a cost of 15¢ per barrel). Each day, at most 5,000 barrels of distilled oil can be sent through the cracker. Each barrel of distilled 1 sent through the cracker yields 0.8 barrel of cracked 1 and 0.2 barrel of cracked 2. Each barrel of distilled 2 sent through the cracker yields 0.7 barrel of cracked 1 and 0.3 barrel of cracked 2. Cracked oil can be used to produce gasoline and jet fuel but not to produce heating oil. The octane level of each type of oil is as follows: naphtha, 8; distilled 1, 4; distilled 2, 5; cracked 1, 9; cracked 2, 6. All heating oil produced can be sold at $14 per barrel; all gasoline produced.$18 per barrel; and all jet fuel produced, $16 per barrel. Marketing considerations dictate that at least 3,000 barrels of each product must be produced daily. Formulate an LP to maximize Olé’s daily profit.

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Heating oil, gasoline and jet fuel are produced. Octan levels are at least 4.5,8.54.5,8.5 and 77 respectively. Crude 11 can be purchased at $12\$12 per barrel and crude 22 at $10\$10 per barrel. Each barrel of crude 11 distilled yields 0.60.6 barrels of nahptha , 0.30.3 barrels of distilled 11 and 0.10.1 barrel of distilled 2.2. Crude 22 yields 0.40.4 barrel of nahptha, 0.20.2 barrels of distilled 11 and 0.40.4 of distilled 2.2. Distilled oil can be cracked and to be more precise: distilled 11 yields 0.80.8 of cracked 11 and 0.20.2 of cracked 2.2. Similarly, each barrel of distilled 22 yields 0.70.7 of cracked 11 and 0.30.3 of cracked 2.2. Nahptha, distilled 1,1, distilled 2,2, cracked 11 and cracked 22 have the following octane levels:8,4,5,98,4,5,9 and 6,6, respectively. Our aim is to maximize daily profit. The objective function will be denoted by z.z. Distilled nahptha can be used only to produce gasoline (ngn_g) and jet fuel (njn_j). Distilled oil can only be used to produce heating oil or it can be sent through the catalytic cracker. Similarly, cracked oil can be used to produce gasoline and jet fuel. Let us h,gh,g and jj be the barrel of heating oil, gasoline and jet fuel sold, respectively. Also let us c1c_1 and c2c_2 denote the barrels of crude 11 and crude 22 bought. Crude must be distilled before being used. If we bought c1c_1 of crude 11 then we obtain 0.6c10.6c_1 barrels of distilled nahptha, 0.3c10.3c_1 barrels of distilled 11 and 0.1c40.1c_4 barrels of distilled 2.2.

Define h1h_1 and h2h_2 as barrels od distilled crude11 and distilled crude 22 used for heating oil. Let us d1d_1 and d2d_2 be the barrels of distilled crude oil 11 and crude oil 22 sent through cracker. Also define crijcr_{ij} as cracked oil from distilled type into two cracked types. Let us write the objective function zz that we mentioned:

z=14h+16g+18j12.1c110.1c20.15(d1+d2)z=14h+16g+18j-12.1c_1-10.1c_2-0.15(d_1+d_2)

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