21. One of the products stocked by Sam’s Club is SamsCola, which is sold in cases. The demand level for SamsCola is highly seasonal.

■ During the slow season, the demand rate is approximately 650 cases a month, which is the same as a yearly demand rate of 65012
7800 cases.

■ During the busy season, the demand rate is approximately 1300 cases a month, or 15,600 cases a year.

■ The cost to place an order is $5, and the yearly holding cost for a case of SamsCola is $12.

a. (**) According to the EOQ formula, how many cases of SamsCola should be ordered at a time during the slow season? How many cases of SamsCola should be ordered during the busy season?

b. (**) Suppose Sam’s Club decides to use the same order quantity throughout the year,Q
150. Calculate total holding and ordering costs for the year. Do not consider safety stock in your calculations. (Annual demand can be calculated as an average of the slow and busy rates just given.)