Harley-davidson has its engine assembly plant in milwaukee

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Reference no: EM132207567

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.

a. How many engines should Harley load onto each truck?

b. 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 costs $1,000, how does this decision impact annual inventory costs at Harley?

Reference no: EM132207567

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