Safety-Kleen Operates the World's Largest Oil Refinery at Elgin, Illinois

question 39

Multiple Choice

Safety-Kleen operates the world's largest oil refinery at Elgin, Illinois. You have been hired by the company to determine how to allocate its intake of up to 60 million gallons of used oil to its three refinery processes: A, B, and C. You are told that electricity costs for process A amount to $150,000 per million gallons treated, while for processes B and C, the costs are respectively $100,000 and $50,000 per million gallons treated. Process A can recover 60 percent of the used oil, process B can recover 55 percent, and process C can recover only 50 percent. Assuming a revenue of $4 million per million gallons of recovered oil and an annual electrical budget of $3.6 million, how much used oil would you allocate to each process in order to maximize total revenues ?

• A)allocate 54 million gals to process A, and 6 million gals to process C
• B) allocate 6 million gals to process A and 54 million gals to process B
• C) allocate 54 million gals to process A, and 6 million gals to process B
• D) allocate 6 million gals to process A and 54 million gals to process C
• E) allocate 6 million gals to process B and 54 million gals to process C

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