Roman Numerals and Cycle Inventory

Topics: Roman numerals, Inventory, Costs Pages: 4 (745 words) Published: May 7, 2013
Question 2: Harley Davidson| | | | |
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. Each truck trip costs \$1,000. The motorcycle plant assembles and sells 300 motorcycles each day. Each engine costs \$500 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? |

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Input| | | | | |
Demand, R =|  | 109,500 | (assuming 365 operating days)| Fixed cost per order, S=| \$ 1,000 | | | | Cost per engine, C =| \$ 500 | | | | Holding cost, h=|  | 20%| | | |

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Output| | | | | |
EOQ =|  | 1,480 | | | |
# of orders per year| | 74 | | | | Annual Order Cost| | \$ 73,993 | | | | Cycle inventory (units)| 740 | | | | Cycle inventory (value)| 369,966 | | | | Annual Holding Cost| | \$ 73,993 | | | | Total Inventory Cost|  | \$ 147,986 | | | | | | | | | |

Order Size Increment =| 20 | | | |
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Order| Annual |  | Total| | |
Size| Order Cost| Holding Cost| Cost| | |
300 | \$365,000| \$15,000| \$380,000| | |
320 | \$342,188| \$16,000| \$358,188| | |
340 | \$322,059| \$17,000| \$339,059| | |
360 | \$304,167| \$18,000| \$322,167| | |
380 | \$288,158| \$19,000| \$307,158| | |
400 | \$273,750| \$20,000| \$293,750| | |
420 | \$260,714| \$21,000| \$281,714| | |
440 | \$248,864| \$22,000| \$270,864| |...