A convenience store, Shop Around the Corner, sells 5000 cans of peas every year. Shop Around the Corner owns his own trucks, each of which has capacity of carrying 100 cans. Utilizing each truck costs $100. There is also $50 fixed replenishment cost and $1 per unit per year inventory holding cost.

a) Calculate the optimal order quantity of Shop Around the Corner at each replenishment?

b) If Shop Around the Corner has a storage capacity of 680 cans, how would the optimal order quantity change?

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