Question 2: Harvey's Specialty Shop produces a special compound that is used in a high-end espresso machine. The compound can be produced at a rate of 5,000 pounds per day. Annual demand for the compound is 0.2 million pounds per year. The fixed cost of setting up for a production run of the compound is $500, and the variable cost of production is $2.50 per pound. The company uses an interest rate of 12 percent to account for the cost of capital, and the costs of storage and handling of the compound amount to 12 percent of the value. Assume that there are 250 working days in a year. a. What is the optimal size of the production run for this particular compound? b. Draw a graph of the amount of inventory over time