The Soda Distributor estimates that the demand for 16-oz cans of "Poppy" soda is 80 cases per

week, and it operates 48 weeks per year. The distributor currently purchases 80 cases of soda every

week at the cost of $10 per case. The inventory-related holding cost for the distributor equals 20%

of the capital tied to the inventory. Each order placed with the supplier costs the distributor $12.

a) How much money can the distributor save if they choose to use the Economic Order

Quantity (EOQ) model instead of ordering 80 cases every week?

b) Assume the soda manufacturer is willing to give a 4% quantity discount if the distributor

orders 500 cases or more at a time. If the distributor wants to minimize its total cost (i.e.,

purchase and inventory-related costs), should the distributor start ordering 500 or more

cases at a time?