Managing Economies of Scale:
Harley purchases from Supplier A are priced at S5 each and used at the rate of 20,000 units per month. Components purchased from supplier B are priced at $4 each and are used at the rate of 2,500 units per month. Components purchased from supplier C are priced at $5 each and used at the rate of 900 units per month. Currently, Harley purchases a separate truckload from each supplier. As part of its JIT drive, Harley has decided to aggregate purchases from the three suppliers. The trucking company charges a fixed cost of $400 for the truck with an additional charge of S100 for each stop. Thus, if Harley asks for a pickup from only one supplier, the percent per year
(a) If Harley orders separately from cach supplier. What is the cycle inventory and total annual cost excluding material cost?