Network Modeling:Oil BlendingTeam 1(Shahram, Yusuf, David, Rush)

Background Information3 Gasoline Brands

◦Regular◦Multigrade◦Supreme

Each brand’s composition = 1:m crude stocks

Crude Stocks◦Each have different viscosity index

Data (given)Crude Stock

Viscosity Index

Cost Supply Per Day($/barrel)

Cost Supply Per DayBarrels

1 20 7.10 1,000

2 40 8.50 1,100

3 30 7.70 1,200

4 55 9.00 1,100

Brand Min Viscosity Index

Selling Price ($/barrel)

Daily Demand (barrels)

Regular 25 8.50 2,000

Multigrade 35 9.00 1,500

Supreme 50 10.00 750

Selling @

So what?Determine an optimal production plan

for a single day…◦Daily demands represent potential

sales… what is the optimal profit? i.e. production =< daily demand

◦The daily demands are to be met precisely… what is the optimal profit? i.e. production = daily demand

◦The daily demands represent minimum sales commitments… what is the optimal profit? i.e. production >= daily demand

Setup

Viscosity Calculations Viscosity Index Minimum Viscosity20 2540 3530 5055

Max!

R M S1 795.8333 204.1667 0 1000 1000 7.12 0 850 250 1100 1100 8.53 795.8333 404.1667 0 1200 1200 7.74 0 41.66667 500 541.667 1100 9

1591.667 1500 750 3964.172000 1500 750

Price 8.5 9 10

Viscosity 39791.67 52500 37500Viscosity 39791.67 52500 37500

Results

Answer A $ 3,964.17

Answer B $ 3,760.00

Answer C $ 3,910.00

ConclusionAn obvious one… equalities

account for more stringent constraints!