An Oil Company Controls Two Oil Fields

Essay

An oil company controls two oil fields. Field 1 can produce up to 45 million barrels of oil per day, and Field 2 can produce up to 55 million barrels of oil per day. At Field 1, it costs $3 to extract and refine a barrel of oil; at Field 2, the cost is $2. The company sells oil to two countries: France and Japan. The shipping costs per barrel are shown below. Each day, France is willing to buy up to 45 million barrels (at $6 per barrel), and Japan is willing to buy up to 35 million barrels (at $6.50 per barrel). Determine how to maximize the company's profit.