Submitted by: Submitted by inactivematrix
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Words: 324
Pages: 2
Category: Business and Industry
Date Submitted: 04/06/2012 11:19 AM
* it produces low- sulphur and high-sulphur crude from coal and shale.
* order for 10,000 gallons of low-sulphur and 5,000 gallons of high-sulphur crude
* only 100 tons of coal and 150 tons of shale remain unallocated
* Kendra and her team assume that 100 tons of coal and 100 tons of shale are available each quarter for producing the crudes
* coal costs US$20 per ton and the shale US$25 per ton
* low-sulphur crude sells for US$0.50 per gallon and high sulphur crude for US$0.30.
* A gasification batch requires 1 ton of coal and 2 tons of shale to yield 100 gallons of low-sulphur crude and 200 gallons of high-sulphur crude.
* Under pressurisation, each batch requires 2 tons of coal and 1 ton of shale to yield 150 gallons of low-sulphur crude and 100 gallons of high-sulphur crude.
* The initial inventory of both high-sulphur and low-sulphur crude is 0
* Management wants to end the second quarter with 1,000 gallons of each type of crude
* variable labour cost for a gasification batch is $10 and $8 for a pressurization batch.
* Crude not used in a quarter can be used in future periods.
* The annual inventory holdings cost is 8% of the value of the crude.
calculate its corresponding profit.
determine the number of gasification and pressurization batches and the number of gallons of low-sulphur and high-sulphur crude to be produced during each of the next two quarters of the coming year that will minimize costs.
1. Formulate a linear programming model that will help the refinery manger to make a decision about the number of gasification and pressurization batches to schedule and the quantities of low-sulphur crude to produce each quarter. Make sure that the decision variables are well defined. Use a software of your choice and find a solution to the problem formulated.