Chapter $11$

Question $2$: Harley$-$Davidson has its engine assembly plant in Milwaukee and its motorcycle assembly plant in Pennsylvania. Engines are transported between the two plants by trucks, with each trip costing $$1500.$ The motorcycle plant assembles and sells $300$ motorcycles per day. Each engine costs $$450,$ and Harley incurs a holding cost per item per year of $20\%$ of the product cost.

a$)$ How many engines Harley load onto each truck?

b$)$ What is the cycle inventory of engines at Harley?

c$)$ What is the optimum number of orders per year?

d$)$ What is the total holding cost and the total ordering cost?

HINT: Full truck is an order