Question
HarleyDavidson has its engine assembly plant in Milwaukee and its motorcycle assembly plant in Pennsylvania. Engines are transported between the two plants using trucks, with
HarleyDavidson 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 $2,000. The motorcycle plant assembles and sells 100 motorcycles each day. Each engine costs $500, and Harley incurs a holding cost of 10 percent per year. a. How many engines should Harley load onto each truck? b. As part of its initiative to implement justintime (JIT) manufacturing at the motorcycle assembly plant, Harley has reduced the number of engines loaded on each truck to 200. If each truck trip still costs $2,000, how does this decision impact annual inventory costs at Harley?
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