Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown below. a. Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0". Flows (in 1,000s of barrels) To LA San Diego Dallas Houston Dallas Refined Houston Refined NY Chicago From LA San Diego Dallas Houston Dallas Refined Houston Refined b. If each refinery had a capacity of 380,000 barrels per day, by how much would the total cost to the company change? Total Cost: $ (It is not $12,670,000 or $1,267,000) Data from the excel Spreadsheet P05_74.xlsx: Ewing Oil data Unit shipping costs (per 1000 barrels) To Dallas Houston New York Chicago From Los Angeles $3,250 $3,300 San Diego $3,400 $3,350 Dallas $3,600 $3,100 Houston $3,550 $3,200
Ewing Oil has oil fields in San Diego and Los Angeles. The San Diego field can produce up to 500,000 barrels per day, and the Los Angeles field can produce up to 600,000 barrels per day. Oil is sent from the fields to a refinery, either in Dallas or in Houston. (Assume that each refinery has unlimited capacity.) To refine 1,000 barrels costs $6,300 at Dallas and $5,700 at Houston. Refined oil is shipped to customers in Chicago and New York. Chicago customers require 400,000 barrels per day, and New York customers require 600,000 barrels per day. The costs of shipping 1,000 barrels of oil (refined or unrefined) between cities are shown below.
a. Determine how to minimize the total cost of meeting all demands. If your answer is zero, enter "0".
| Flows (in 1,000s of barrels) | |||||||||||||||
| To | |||||||||||||||
LA |
San Diego |
Dallas |
Houston |
Dallas Refined |
Houston Refined |
NY |
Chicago |
||||||||
| From | LA | ||||||||||||||
| San Diego | |||||||||||||||
| Dallas | |||||||||||||||
| Houston | |||||||||||||||
| Dallas Refined | |||||||||||||||
| Houston Refined |
b. If each refinery had a capacity of 380,000 barrels per day, by how much would the total cost to the company change?
Total Cost: $ (It is not $12,670,000 or $1,267,000)
Data from the excel Spreadsheet P05_74.xlsx:
| Ewing Oil data | |||||
| Unit shipping costs (per 1000 barrels) | |||||
| To | |||||
| Dallas | Houston | New York | Chicago | ||
| From | Los Angeles | $3,250 | $3,300 | ||
| San Diego | $3,400 | $3,350 | |||
| Dallas | $3,600 | $3,100 | |||
| Houston | $3,550 | $3,200 |
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