Case Studies

OMEGA System of Blending Gasoline for Texaco Oil Company

Calvin DeWitt, Leon Lasdon, Allan Waren, Donald Brenner, & Simon Milhem. OMEGA: An Improved Gasoline Blending System for Texaco. Interfaces, 19:1 (Jan.-Feb. 1989), 85-101.

Another use of linear programming is in the OMEGA system of blending gasoline for Texaco Oil Company. Crude oil has different processes it will go through to produce light crude oil such as gasoline, all the way through to heavy crude oil, which would be fuel oil and asphalt. Blending to achieve the different grades of oil is a linear programming problem. Scheduling the blending operations in a plant to produce sufficient amounts of each type of oil is not linear. There are over 15 stocks (such as vapor pressure, octane indices, and lead content) that yield up to eight different blends. There are 40 variables and 71 constraints. By using the OMEGA System in seven of its refineries, Texaco saw a 30% increase in profits, which amounted to over $30 million.

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