4.2 Pegasus Motors Corp. has its engine assembly plant in Milwaukee and its motorcycle assembly plant in Pittsburgh. Engines are transported using trucks from Roadway Inc., which costs $4000 per trip. The motorcycle plant opens 50 weeks a year and 5 days a week. Each business day the plant produces 800 motorcycles. The holding cost for each engine is $100 per year.

(a) How often should Pegasus transport engines and in what quantity?

(b) Supercheap Inc. offered to transport engines for Pegasus with the following pricing policy: for each trip a xed $1000 is charged; if the amount of engines transported is more than 2500, then each additional engine is charged an extra $3. Will Pegasus save money by using Supercheap Inc.?