Fliboardis a startup company that develops self-balancing scooters (hoverboards) and sells online

–52weeks a year

•Fliboard currently sells two products, Proboard(P1) and Babyboard(P2)

•Weekly demand (independent)

–Proboard (P1) : 30units per week with standard deviation of 15units per week

–Babyboard (P2): 20units per week with standard deviation of 10units per week

•Price

–Proboard : $400

–Babyboard: $300•Costs of battery

–Proboard: $150Samsung 42V Li-ion battery (B1)

–Babyboard: $100HoverFixer36V Li-ion battery (B2)

•Cost of material other than battery

–Proboard : $150

–Babyboard: $100

Fliboard uses continuous review policy

–Lot size is calculated using economic order quantity (EOQ)

–Batteries are supplied independently from each supplier

•Cycle service level (CSL)

–Samsung battery : 0.99

–HoverFixerbattery: 0.99•Replenishment lead time

–Samsungbattery : 4weeks

–HoverFixerbattery: 4weeks

•Fixed order cost

–Samsung battery : $1,000per order

–HoverFixerbattery: $1,000per order•Inventory holding cost of battery

–Samsungbattery : $60

–HoverFixerbattery: $40

questions

Calculate following values for replenishing battery

–(1-1) Lot size (Q)

•For Samsung battery

•For HoverFixerbattery

–(1-2) Safety inventory (ss)

•For Samsung battery

•For HoverFixerbattery

–(1-3) Annual ordering cost (AOC)

•For Samsung battery

•For HoverFixerbattery

–(1-4) Annual holding cost (AHC)

•For Samsung battery

•For HoverFixerbattery

–(1-5) Annual material cost including battery (AMC)

•For Proboard

•For Babyboard

Calculate total profit of the current operation (two hoverboards)

–Assume annual ordering cost and holding cost of all components except batteries are negligible

•Thus, we only need to consider costs AOC, AHC, and AMC in (1-3), (1-4) and (1-5) for calculating profit–(1-6) Total profit

•Profit = Revenue –Total Cost

•Where total cost is sum of:–Annual material cost –Annual ordering cost–Annual holding cost