Gasoline Blending One of the earliest and most successful applications of linear
ID: 1104260 • Letter: G
Question
Gasoline Blending One of the earliest and most successful applications of linear optimization was in the oil industry in the 1950s. According to Bill Drew, the former manager of research for Exxon Mobil, the company used linear optimization to "sch our tanker fleets, design port facilities, blend gasoline, create financial mo you name it." In this problem, we will use optimization to blend gas (While the application of this problem is real, the data that we will be uis here has been created for this problem.) edule ancial models Gasoline blending occurs in oil refineries, where crude oil is processed an refined into more useful products consider three products: super gasoline, regular gasoline, and diesel fuei. can be made by mixing three different types of crude oil: crude 1, cr crude 3. Each product is distinguished by its octane rating, when e uch as gasoline and diesel fuel. We will nd ude 2, a ich measures
Explanation / Answer
a) 1) there are 9 decision variable that affect the linear optimisation problem. variables are-
a) price of super gasoline
b) price of regular gasoline
c) price of diesel fuel
d) cost of super gasoline
e) cost of regular gasoline
f) cost of diesel fuel
g) octane rating in each product
h) iron content in each product
i) demand for each product
2) objestive function is
$70* quantity of super gasoline + $60* quantity of regular gasoline +$50 quantity of diesel fuel -$45*total barrels of crude 1 -$35* total barrels of crude 2 -$25* total barrels of cude 3
3) constraints are
1) barrels of crude 1 + barrels of crude 2 + barrels of crude 3 is less than and equal to 14000
2) total barrels of crude 1 = 5000
3) total barrels of crude 2 = 5000
4) total barrels of crude 3 = 5000
B) you can solve the optimal solution by using above objective function and constraints.
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