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Harley davidson purchases components from three suppliers:
a. Supplier A - item cost $5 with a demand of 20,000 per month
b. Supplier B - item cost $4 with a demand of 2500 per month
c. Supplier C - item cost $5 with a demand of 900 per month
d. Holding cost for all items is 20%
e. The trucking company charges a fixed cost of $400 per truck with $100 for each stop
f. Current practice is separate truckloads per supplier. HD is interested in JIT so is considering supply order aggregation.
g. syggest a replenishment strategy for HD that minimizes annual cost. Compare that to HD's current strategy of seperate orderes from each supplier.
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An analysis of the holding costs, including the appropriate annual holding cost rate.
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