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The steps to determine the optimal number of production runs for two different modes of production for boilin' oil, considering constraints on crude inputs, output sales, and maximizing net margin. Instructions on creating the model, inputting data, calculating total production and requirements, and using a solver to find the optimal solution.
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Agenda:
The worksheet titled "template" contains some basic headings to help get us started model for the Boilin Oil Case (Pg. 101 in course pack).
Inputs Outputs Mode 1 1 Crude A, 3 Crude B 2.5 Motor Gasoline, 1 Heating Oil Mode 2 2 Crude A, 1 Crude B 0.7 Motor Gasoline, 2 Heating Oil
The goal is to determine how many production runs to have for each mode based on following information:
Creating the Model
Input the required data into the model.
Input formulas that will calculate the following, based on the number of productio
Calculate the total bbls required for both Crude A and Crude B. - The sum of the Cru required in each mode. Repeat for the calculation of Crude B required.
Solver Time!
The objective function in this example is Net Margin, which we want to maximize. O decision variables are the number of production runs in each mode. We must meet t constraints that were listed in Problem Outline.
You should find that the optimal solution is to have 45,000 production runs in Mode 15,000 production runs in Mode 2.
Check out the extra practice lab (Mountain Wear) that was also posted this This should give you some extra practice with model building before Quiz 2 9).