For the oil blending example (Example 4.4 in Chapter 4), discuss where you think the assumptions of a linear model are most likely to break down. How might an NLP model look in this situation?
(Reference Example 4.4)
Chandler Oil has 5000 barrels of crude oil 1 and 10,000 barrels of crude oil 2 available. Chandler sells gasoline and heating oil. These products are produced by blending the two crude oils together. Each barrel of crude oil 1 has a “quality level” of 10 and each barrel of crude oil 2 has a quality level of 5.6 Gasoline must have an average quality level of at least 8, whereas heating oil must have an average quality level of at least 6. Gasoline sells for $75 per barrel, and heating oil sells for $60 per barrel. We assume that demand for heating oil and gasoline is unlimited, so that all of Chandler’s production can be sold. Chandler wants to maximize its revenue from selling gasoline and heating oil.
Objective To develop an LP spreadsheet model for finding the revenue-maximizing plan that meets quality constraints and stays within limits on crude oil availabilities.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.