Explain how does the decision impact annual inventory costs

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Reference no: EM13107120

Q. Supply chain management.

1. Harley Davidson has its engine assembly plant in Milwaukee and its motorcycle assembly plant in Pennsylvania. Engines are transported between the two plants using trucks, with each trip costing $1,000. The motorcycle plant assembles and sells 300 motorcycles each day. Each engine costs $500 and Harley incurs a holding cost of 20 percent per year. Explain how many engines should Harley load onto each truck? Illustrate what is the cycle inventory of engines at Harley.

2. As part of its initiative to implement just-in-time (JIT) manufacturing at the motorcycle assembly plant. Harley has reduced the number of engines loaded on each truck to 100. If each truck trip still cost $1,000, explain how does the decision impact annual inventory costs at Harley? Illustrate what should the cost of each truck be if a load of 100 engines is to be optimal for Harley?

Reference no: EM13107120

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