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Consider the following Harley's current network design with direct shipment.
Harley Davidson purchases components from three suppliers. Monthly demand rates (D) and purchasing prices
(P) for components are provided above. Currently, as depicted in above network, Harley procures components
from each supplier with full truckload strategy, incurring a fixed cost of $500. As part of JIT drive, Harley
decided to aggregate purchases from the three suppliers. The truck company charges a fixed cost of $400 for the truck with an additional charge of $100 for each stop. Harley incurs a holding cost of 20 percent per year. Using direct shipment with milk runs, suggest a replenishment strategy for
a) comprlete aggregation
b) optimum solution using solver
Compare the cost of your results with Harley's strategy of ordering separately from each supplier.
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