Produces two gasoline-regular and premium

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Eastern Oil Company produces two gasoline-regular and premium. The profit contribution is $.30/gallon for regular and $.50/ gallon for premium gasoline. Each gallon of regular gasoline contains 0.3 gallon of Grade A crude oil and each gallon of premium gasoline contains 0.6 gallon of Grade A crude oil. For the next product period the company has 18,000 gallons of Grade A crude oil available. The refinery used to produce the gasoline has a production capacity of 50,000 gallons for the next production period. The oil distributors have indicated that the demand for the premium gasoline in the next production period will be at most 20,000 gallons.

Reference no: EM131031079

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