A B C D E F G H I J K L

1 Chandler oil blending model

2
3 Monetary inputs Gasoline Heating oil
4 Selling price/barrel $75 $60
5
6 Quality level per barrel of crudes
7 Crude oil 1 10
8 Crude oil 2 5
9
10 Required quality level per barrel of product
11 Gasoline Heating oil
12 8 6
13
14 Blending plan (barrels of crudes in each product)
15 Gasoline Heating oil Barrels used Barrels available
16 Crude oil 1 3000 2000 5000 5000
17 Crude oil 2 2000 8000 10000 10000
18 Barrels sold 5000 10000
19
20 Constraints on quality
21 Gasoline Heating oil
22 Quality points obtained 40000 60000
23
24 Quality points required 40000 60000
25
26 Objective to maximize
27 Revenue $975,000
28
29 **NOTE THAT WE CANNOT USE AVERAGE DIRECTLY BECAUSE ITS NOT LINEAR AND HENCE, WE NEEED TO LOOK AT THE GROSS POINTS, REARRANGING THE INEQUALITY.