Saudi Oil Company has 5000 barrels of Type A oil and 10000 barrels of Type B oil. The company sells two products: Gasoline and Heating Oil. Both products are produced by combining Type A and Type B oil. The "quality level" of Type A oil is 10 and that of Type B oil is 5. Gasoline must have an average quality level of at least 8 and heating oil, at least 6. Demand for each product is created by advertising. Each dollar spent advertising gasoline creates 5 barrels of demand and each spent on heating oil creates 10 barrels of demand. Gasoline is sold for $25 per barrel, and heating oil for $20. Formulate an LP model to help Saudi Oil maximize its profits. (Assume that neither Type A nor Type B oil can be purchased)
Decision variables, constraints and an objective function are found for a linear programming problem.