Question 1.
No. of units = 50 units *52 weeks =2600units Fixed order costs year round 2600/200=$10.4
Economic lot size Samsung Q= 2DCs/pC = (2*(2600)* ($1000+$13)) / (50*52*40)
Answer= 7.11
Hoverfixer= (2*2600*($1000+$43.33)) / (50*52* 20) = 7.22
Average cycle costs= Q/2= Samsung 7.11/2= 3.6 Hoverfix= 7.22/2= 3.6
Samsung= (100*50*52)/ 7.11= $36568
Hoverfixer= (50*50*52)/7.22= $18005
Annual holding costs= (Q/2)Holding Cost. Samsung (7.11/2)40= $26* 52= 7394 Hoverfixer (7.22/2)20= $40*52=3754.4
Annual material cost= (40*52*200) + (10*52*100)= $468000
Total profit= (40*300*52) + (10*200*52)= $728000 less total costs = (36568+7394+3754.4+18005+468000) Answer= $194279
Question 2
Lot size= Q= 2DCs/pC = (2*(2600)* ($1500+$13)) / (50*52*40) Answer= 8.6 = 2*2600*($1500+$43.33)) / (50*52* 20) = 8.78
Average cycle costs= Q/2= Samsung 8.6/2= 4.3 Hoverfix= 8.78/2= 4.39
Annual ordering cost= Annual ordering cost= Cost per order* orders per year/ Order size.
Samsung= (100*50*52)/ 51= $5098
Hoverfixer= (50*50*52)/52= $2500
Annual holding costs= (Q/2)Holding Cost. Samsung (8.6/2)40= $172* 52= 8944 Hoverfixer (8.78/2)20= $40*52=4565.6
Annual material cost= (40*52*200) + (10*52*100)= $468000
Total profit= (40*300*52) + (10*200*52)= $728000 less total costs = (468000+2500+5098+195000) Answer= $57042
Question 3.
Economic lot size Samsung Q= 2DCs/pC = (2*(2600)* ($1000+$13)) / (50*52*40) Answer= 7.11
Average cycle costs= Q/2= Samsung 7.11/2= 3.6*52=
Annual ordering cost= Cost per order* orders per year/ Order size. Samsung= (100*50*52)/ 7.11= $36568
Annual holding costs= (Q/2) Holding Cost. Samsung (7.11/2)40= $26* 52= 7394.4
Annual material cost= (40*52*200)= $416000
Total profit= (40*300*52 less ($416000+7394.4+$36568)= 164037.6
sFlipsboard should continue with their current operations as it generates more revenue for them hence increased incomes. The use of both Samsung and hover fixer batteries has proven to be effective due to good profitable margins. The current operation is the best fit for the company.
