r gallon for regular gasoline and $0.50 per gallon for premium gasoline. Each gallon of regular gasoline contains 0.3 gallons of grade A crude oil and each gallon of premium gasoline contains 0.6 gallons of grade A crude oil. For the next production period, CWD has 18,000 gallons of grade A crude oil available. The refinery used to produce the gasolines has a production capacity of 50,000 gallons for the next production period. CWD Oil’s distributors have indicated that demand for the premium gasoline for the
Question 1 A
CWD Oil produces two grades of gasoline: regular and premium. The profit contributions are
$0.30 per gallon for regular gasoline and $0.50 per gallon for premium gasoline. Each gallon of
regular gasoline contains 0.3 gallons of grade A crude oil and each gallon of premium gasoline
contains 0.6 gallons of grade A crude oil. For the next production period, CWD has 18,000 gallons
of grade A crude oil available. The refinery used to produce the gasolines has a production capacity
of 50,000 gallons for the next production period. CWD Oil’s distributors have indicated that
demand for the premium gasoline for the next production period will be at most 20,000 gallons.
a. Formulate a linear programming model that can be used to determine the number of gallons of
regular gasoline and the number of gallons of premium gasoline that should be produced in order
to maximize total profit contribution
b. Graph the feasible region.
c. Determine the coordinates of each extreme point.
d. What is the optimal solution.
e. Solve in excel using the template provided.
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