# Maximize crude oil chain weekly profit

• gfd43tg
In summary, the conversation discusses a problem of determining the most profitable process, using Fuel Process 1 as an example. The profit equation is given along with demand constraints and the constraint that C = 100. There is a concern about double-counting and the possibility of a discrete problem.
gfd43tg
Gold Member

## The Attempt at a Solution

I sort of want to make this into a linear program problem, but I think that it should be solvable without it, since I never learned about it in this particular course.

I will just work with Fuel Process 1 as an example, and I can do the other processes if I get this one correct to figure out the most profitable process.

The profit, ##P##, can be determined,

$$P = (0.6)(45)G + (0.2)(30)H + (0.1)(15)J + (0.0)(60)L - (0.1)(15)O - (15)C - (5)C$$

The demand constraints,
$$\begin{bmatrix} G \\ H \\ J \\ L \end{bmatrix} \le \begin{bmatrix} 170 \\ 85 \\ 85 \\20 \end{bmatrix}$$
##C = 100##
##G + H + J + L + O = C##

Am I going in the right direction for this one? Feels like I may be double counting the operating losses with the cost of the crude oil twice.

Hi,
Not much response so far, let me give some comments:

I think you are double-counting: the O loss is in the C cost (it looks as if disposal doesn't cost anything) .

You use C = 100 as a constraint. It isn't clear to me if C ##\le## 100 is also possible; perhaps not, in which case you have a discrete problem on your hands.

## 1. What is the crude oil chain and how does it relate to weekly profit?

The crude oil chain refers to the entire process of extracting, refining, and distributing crude oil to be used as fuel or other products. Maximizing the profit in this chain involves finding the most efficient and cost-effective ways to extract, refine, and sell the crude oil.

## 2. How is weekly profit calculated in the crude oil chain?

Weekly profit in the crude oil chain is calculated by subtracting the total production costs from the total revenue generated. This includes expenses for extraction, refining, transportation, and any other associated costs.

## 3. What factors influence the weekly profit in the crude oil chain?

Several factors can influence the weekly profit in the crude oil chain, including the current market demand for crude oil, the cost of production, transportation logistics, and any fluctuations in oil prices.

## 4. How can the crude oil chain's weekly profit be maximized?

To maximize the weekly profit in the crude oil chain, companies must constantly evaluate and optimize their production processes, minimize costs, and adapt to market demand. This may involve investing in new technology, improving efficiency, and developing strategic partnerships.

## 5. What are the potential risks and challenges in maximizing the crude oil chain's weekly profit?

One major risk in maximizing the weekly profit in the crude oil chain is the volatility of oil prices, which can greatly impact revenue. Other challenges may include regulatory changes, geopolitical conflicts, and unexpected disruptions in production or transportation. Additionally, there may be ethical and environmental concerns that need to be addressed in the pursuit of maximizing profit.

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