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)

Now Fliboard decides to use Samsung battery for both hoverboards so that demandsof batteries can be aggregated

Target CSL

Samsung battery: 0.99Replenishment lead time

Samsung battery: 4weeksFixed order cost

Samsung battery: $1,000per orderInventory holding cost of battery

Samsung battery: $60

(3-1) Lot size (Q) For Samsung battery