Answer Happy

Sunco Oil produces oil at two wells. Well 1 can produce upto 150,000 barrels per day, and well 2 can produce up to 200,000barrels per day. It is possible to ship oil directly from thewells to Sunco's customers in Los Angeles and New York. Alternatively, Sunco could transport oil to the ports of Mobile orGalveston, and then ship it by tanker to New York or LosAngeles. Mobile and Galveston have no storage facilities, soeverything shipped in to those ports must be shipped out aswell. Los Angeles requires 160,000 barrels per day, and NewYork requires 140,000 barrels per day. The costs of shipping1,000 barrels between various locations is given in the table below(a dash indicates shipments that are not allowed).
A. Set up and solve the problem to minimize the total shippingcost for Sunco.
(HINT 1: The minimum total shipping cost forthe correct solution should be $7,500.)
(HINT 2: Model the requirements, supplycapacities, and shipments in 1,000's of barrels.)
B. Explain the solution in terms of resulting decisionvariables. Why are some routes and nodes used and others arenot?
C. Format the problem to be presentation-ready.
Shipment Costs per 1,000 barrels
To
Well1 Well2 Mobile Galveston NY LA
Well1 - - $10 $13 $25 $28
Well2 - - $15 $12 $26 $25
From Mobile - - - $6 $16 $17
Galveston - - $6 - $14 $16
NY - - - - - $15
LA - - - - $15 -