An oil refinery produces gasoline, jet fuel and diesel fuel. The profit per gall

Question

An oil refinery produces gasoline, jet fuel and diesel fuel. The profit per gallon for the sale of these fuels are $0.15, $.12, and $.10, respectively. The refinery has a contract with an airline to deliver a minimum of 20,000 gallons per day of jet fuel and/or gasoline fuel(or some of each). It has a contract with a trucking firm to deliver a minimum of 50,000 gallons per day of diesel fuel and/or gasoline( or some of each). The refinery can produce 100,000 gallons of fuel per day, distributed among the fuels in any fashion. It wishes to produce at least 5000 gallons per day of each fuel. How many gallons of each should be produced to maximize daily profit?

Explanation / Answer

The first step I would take is mostly logical, we obviously want more gasoline than the other two because we get a better profit from it.

Then we know we need a minimum of 5,000 gallons each giving us a total of 15,000 gallons accounted for out of 100,000

So this leaves us with ideally wanting 90,000 gallons of gasoline, and 5,000 each of Jet and diesel.

We can do this because of both the airline and the trucker accepting a mix of either Jet fuel and gasoline for the airline, or diesel and gasoline for the trucker.

So the final answer would be Jet=5,000, Diesel=5,000, and Gasoline=90,000.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---