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M08 Homework: Cycle Inventory | Problem 1: Ford has its engine assembly plant in Wayne, Michigan and its moving assembly plant in Chicago, Illinois. Engines are transported between the two plants using trucks, with each trip costing $2,000. The moving assembly plant in Chicago assembles and sells 3,000 a year. Each engine costs $500; Ford incurs a holding cost of 30 percent per year. Show your formulas if you want partial credit. a) (3 points) How many engines should Ford load onto each truck? b) (3 points) What is the corresponding optimal orders per year? c) (3 points) What is the cycle inventory of engines at Ford? d) (3 points) What is the corresponding total cost (holding and ordering cost only - do not include material cost)? e) (3 points) We know the optimal lot size from part a. But we have a constraint that order quantities must be in units of 100, how many engines should Ford ship at a time to minimize total cost? f) (3 points) If the constraint in parte changes to order quantities must be in units of 200, how many engines should ford ship at a time to minimize total cost? How do you interpret your answer? g) (3 points) What should the order cost be if a load of 300 engines is to be optimal for Ford? h) (3 points) If demand, and thus production, for Ford cars grows, but all other input data remain unchanged. Would you expect cycle inventory of engines at Ford to increase or decrease