Supposing you are a senior chief production engineer employed by an oil company based in Istanbul. The company decided to blend engine oils. So$,$ you are required to lead and substantiate this Project lubricating engine oil cost calculation prior to have decided whether it is envirometally safe and competitive with local market conditions. This engine oil meeting the latest SAE requirements as set forth. Engine oil named tentativly is Super Engine Oil GTX meeting the requirements of as low as twente degree in C winter and as high as fifty degree C in summer conditions, and blending formulation given below:

raw stocks

$\%$ by wt

St$.$ LN @ $6$Cst

$52\mathrm{.}35$

St$.$ HN @ $12$Cst

$33\mathrm{.}00$

st$\mathrm{.}7577$C

$8\mathrm{.}50$

st$\mathrm{.}77498$

$0\mathrm{.}15$

st$\mathrm{.}16010$

$4\mathrm{.}50$

st$\mathrm{.}611$

$1\mathrm{.}50$

$100\mathrm{.}00$

Total:

It has been decided by the company that the first batch of the engine oil is packaged in $185$ kg drums. Drum price EX$-$Work is $20$ USD per each. Drums are transported by a regular agreed local truck firm. A truck load is consisted of $200$ drums per delivery to the company blending facility is costing company about $1000$ USD. Drum labelling and printing expenses is about $1$ USD per each.

Base oil prices are currently taken from monthly Platts FOB NWE basis publications and respectively $1500$ and $1750$ USD $/$mt$.$

Used supplementary additives current costs are base oils supply are carried out by $3000$ mt sea going containers on regular agreed basis from ARA Region to The company storage side in the blending plant. No custom duty and other charges are considered due to custom union agreement between the countries. The price contribution of base oil carriage cost is assumed to be $25$ USD per metric tonne including all charges incurred due to base oil landing cost to the company installation, respectively: $3000$ USD$/$mt$,4000$ USD$/$mt$,5000$ USD$/$mt and $5500$ USD$/$mt$.$ For the sake of simplicity labor and energy cost contribution to overall cost calculation is exempted. Current valu added value is $20\%$ and the tax on consumption is $70\%$ based on overall cost of the product.

Answer the followings:

$1-$ If you print the grade of this oil in terms of SAE grade on a label what would you write oil grade in letters $(10)$

$2-$ Claim wether this oil is mono $/$multy grade oil $(5)$

$3-$ Explain what means of mono $/$ multy grade oils $(5)$

$4-$ What will be the cost of a drum of the engine oil? $(50)$

$5-$ Calculate a drum oil sales price to customer $(15)$

$6-$ How would you show relationship between mono or multy grade oils chages. Show the changes on a graphical presentation.$(15)$