An Oil Company Produces Oil at Two Wells

question 82

Essay

An oil company produces oil at two wells. Well 1 can produce up to 150,000 barrels per day, and Well 2 can produce up to 200,000 barrels per day. It is possible to ship oil directly from the wells to customers in Los Angeles and New York. Alternatively, the company could transport oil to the ports of Mobile and Galveston and then ship it by tanker to New York or Los Angeles. Los Angeles requires 160,000 barrels per day, and New York requires 140,000 barrels per day. The costs (in dollars) of shipping 1000 barrels between various locations are shown below:
-(A) Assume that before being shipped to Los Angeles or New York, all oil produced at the wells must be refined at either Mobile or Galveston. To refine 10000 barrels of oil costs $12 at Mobile and $10 at Galveston. Assuming that both Mobile and Galveston have infinite refinery capacity, determine how to minimize the daily cost of transporting and refining the oil requirements of Los Angeles and New York.
(B) Rework (A) under the assumption that Galveston has a refinery capacity of 150,000 barrels per day, and Mobile has a refinery capacity of 180,000 barrels per day.

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Definitions:

Mechanical Ventilation

The use of a machine to assist or replace spontaneous breathing by moving air in and out of the lungs.

Fluid Volume Excess

A medical condition where there is too much fluid in the body, often leading to swelling and health complications.

Low Sodium

A diet or dietary strategy focusing on the reduction of sodium intake to promote heart health and prevent hypertension.

Respiratory Alkalosis

A medical condition characterized by a decrease in the partial pressure of carbon dioxide in the blood, leading to increased blood pH.