Fliboard uses continuous review policy

Now Fliboard orders both batteries jointly from two suppliers

Cycle service level (CSL)

Samsung battery : 0.99

HoverFixerbattery: 0.99

Replenishment lead time

Samsungbattery : 4weeks

HoverFixerbattery: 4weeks

Fixed order cost

Joint ordering: $1,500per order

Inventory holding cost of battery

Samsungbattery : $60

HoverFixerbattery: $40

Questions

Calculate following values for replenishing battery

(2-1) Lot size (Q)

For Samsung battery

For HoverFixerbattery

(2-2) Safety inventory (ss)

For Samsung battery

For HoverFixerbattery

(2-3) Annual ordering cost (AOC)

For both Samsung battery and HoverFixerbattery

(2-4) Annual holding cost (AHC)

For Samsung battery

For HoverFixerbattery

(2-5) 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 (2-3), (2-4) and (2-5) for calculating profit(2-6) Total profit Profit = Revenue Total Cost

Where total cost is sum of:

Annual material cost

Annual ordering cost

Annual holding cost