Cycle inventory-total annual cost excluding material cost

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Reference no: EM131766612

Managing Economies of Scale:

Harley purchases from Supplier A are priced at S5 each and used at the rate of 20,000 units per month. Components purchased from supplier B are priced at $4 each and are used at the rate of 2,500 units per month. Components purchased from supplier C are priced at $5 each and used at the rate of 900 units per month. Currently, Harley purchases a separate truckload from each supplier. As part of its JIT drive, Harley has decided to aggregate purchases from the three suppliers. The trucking company charges a fixed cost of $400 for the truck with an additional charge of S100 for each stop. Thus, if Harley asks for a pickup from only one supplier, the percent per year

(a) If Harley orders separately from cach supplier. What is the cycle inventory and total annual cost excluding material cost?

Reference no: EM131766612

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