EXERCISE 02 (a) A company X sells 1000 gallons of fuel per month at a constant rate. The fuel is purchased in bulk from a local wholesaler, who delivers instantly on demand. A delivery charge of 200 is made, regardless of the order size, and the wholesaler's price is 6 per gallon. The cost of capital tied up in stock is estimated as 20% of the average stock value per annum. What are the values for: (i) the optimal order size (i.e. the Economic Order Quantity or EOQ) and (ii) the total annual variable cost for company X?