Assignment 1: Problem 1 - Shale Oil Optimization
1. Problem Data
• Crude oil input capacity: 1,500,000 bbl/day
• Processes:
1) Distillation → Base stock ON=82, yield 0.2 bbl/bbl crude
2) Cracker → Cracked stock ON=98, yield 0.5 bbl/bbl base input, capacity 200,000 bbl/day
3) Blender → mixes base (ON=82) + cracked (ON=98) into gasoline
• Final products:
- Regular (ON=87), Premium (ON=89), Super (ON=92)
• Net profit (/bbl): Regular $6.70; Premium $7.20; Super $8.10
• Maximum demand: Regular 50,000; Premium 30,000; Super 40,000 bbl/day
2. Decision Variables
X = crude processed (bbl/day)
C = input to cracker (bbl/day)
B_R, B_P, B_S = base stock used for Regular, Premium, Super
K_R, K_P, K_S = cracked stock used for Regular, Premium, Super
R, P, S = final gasoline produced for Regular, Premium, Super
3. Objective Function
Maximize profit:
Z = 6.7R + 7.2P + 8.1S
4. Constraints
• Base balance: B_R + B_P + B_S + C ≤ 0.2X
• Cracker balance: K_R + K_P + K_S = 0.5C
• Cracker capacity: C ≤ 200,000
• Distillation capacity: X ≤ 1,500,000
• Octane requirement:
- Regular: 11K_R ≥ 5B_R
- Premium: 9K_P ≥ 7B_P
- Super: 6K_S ≥ 10B_S
• Demand limits: R ≤ 50,000; P ≤ 30,000; S ≤ 40,000
• Non-negativity of all variables
5. Optimal Solution
Satisfy full demand with minimum cracked composition required by octane standards:
• Regular 50,000 bbl: B_R = 34,375; K_R = 15,625
• Premium 30,000 bbl: B_P = 16,875; K_P = 13,125
• Super 40,000 bbl: B_S = 15,000; K_S = 25,000
• Total cracked = 53,750 → cracker input C = 107,500 (≤200,000)
• Base needed = 66,250 + 107,500 = 173,750 → crude X = 868,750 (≤1,500,000)
Maximum profit: Z* = $875,000 per day
