A used automobile can be purchased by a student to provide transportation to and from university for $10,000 as-is (i.e. without warranty). First year maintenance cost is expected to be $400 and the maintenance costs will increase by $100 per year thereafter. Operation costs for the automobile will be $2,000 for every year the automobile is used and its salvage value decreases by 15% per year. i) What is the economic life of the vehicle without considering the varying value of money over time? ii) What is the economic life of the vehicle if the rate of interest is 5%? A component manufacturer has a demand of 160 units per week. No shortages are allowed. It costs $250 to initiate manufacturing to produce at a rate of 500 units per week. The unit production cost is $40. The holding cost is $0.25 per unit. Determine i) the minimum cost production quantity ii) the minimum cost procurement level if production lead time is 12 weeks