2- Be sure to make all your assumptions explicit. Egg: Genetic Solution (Objective function, size of the population, mutations and crossover parameters, convergence …etc.).
3- The report of 1500 words or more is to be submitted.
Answer preview
The companies noticed that they get more profits from selling diesel fuel than from the sale of liquid petroleum gas. But both products have to be produced to reduce the risks that may arise from the failure of one product in the market. The company has to employ a product mix of both diesel fuel and liquid petroleum that will be supported by the limited resources and produce quantities of the products that will enable it to maximize profits. Producing both diesel fuel and liquid petroleum will enable the company to reduce costs and it will be able to maximize profits creating a room for expansion.
A model representing the problem; variables and relationships between them
Linear programming model will help the company to come up with accurate data on the production levels of diesel fuel and liquid petroleum gas. The accurate volumes will enable the oil companies to produce the required units that will achieve maximum profit in the market when the company’s resources are used completely. The company takes raw oil as input and the two products are diesel fuel and liquid petroleum gas.
