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: $300Costs 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: 0.99Replenishment lead time

Samsungbattery : 4weeks

HoverFixerbattery: 4weeks

Fixed order cost

Samsung battery : $1,000per order

HoverFixerbattery: $1,000per orderInventory 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 costAnnual holding cost