Question 2. (30 points) A manufacturer of oil filters for produces eight different oil types. The company has recently contracted to supply fixed number of oils for the next three

years. Table below shows the relevant data for this problem. The company considers a 3 percent annual interest rate for storage cost and an 18 percent annualinterest rate for the cost of capital. Assume that there are 250 workdays in a year and the setup costs are $20 per hour. a) What is the optimal rotation cycle time? b) What are the optimal lot sizes of each part? c) What is the average annual cost of holding and setup for these oils at the optimal solution?

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