Problem
Harley-Davidson 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 $ 1,500. The motorcycle plant assembles and sells 250 motorcycles each day. Each engine costs $600, and Harley incurs a holding cost of 25 percent per year.
1. What is the Annual Demand (D)?
2. What is the Cost per Unit (C)?
3. What is the Fixed Cost Incurred per Order (S)?
4. What is the Ordering Cost?
5. Annual Holding Cost (hC)?
6. Total Inventory Cost?