Three refineries Assume that oil requirements from customers vary from day to day, and that oil is shipped only through ports where it is placed in tanks for being transported to customers the same day or temporally stored for being transported later. Cost for thousand barrels stored per day is USD (∙). The maximum tanks’ capacity in thousands of barrels is (∙) at M and (∙) at G.
a) Find an optimal shipping pattern minimizing the sum of shipping and storage costs for the following oil requirements of customers in NY and LA for the nearest two days by modifying the model from Task 1. Transshipment a) and provide solution interpretation.
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b) Find out without re-solving the model from a) how much could the company reduce the total shipping and storage costs by a marginal increase in the tanks’ capacity at each port without changing the shipping pattern.
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