Harley Davidson has its engine assembly plan, in Milwaukee and its motorcycle as

Question

Harley Davidson has its engine assembly plan, in Milwaukee and its motorcycle assembly plant in Milwaukee and its motorcycle assembly plant in pennsylvanai. Engines are transported between the two plants using trucks. Each truck trip costs $ 1.500. The motorcycle plant assembles an sells d(X) motorcycles each day. Each engine costs $450 and Harley incurs a holding cost of 20 percent per year. How many engines should Harley load onto each truck? What is the cycle inventory of engines at Harley? Harley has decided to implement just-in-time (JIT) at the motorcycle assembly plant. As part of this initiative it has reduced the number of engines loaded on each truck to 100. If each truck trip still costs $1,500, how does this decision impact annual cost at Harley? What should the cost of each truck be if a load of Kill engines is to be optimal for Harley?

Explanation / Answer

1) How many engines should Harley load onto each truck

D = 3,000

S = 1,500

C = 450

h = 0.2

Q* = SQRT((2DS)/(hC)) = SQRT((2*3000*1500)/(0.2*540)) = SQRT(9000000/108) = 288.67

What is the cycle inventory of engines at Harley?

Cycle inventory = Q*/2 = 288.67/2 = 144.335

Please submit another question for part 2

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