What is the minimal annual inventory cost

Assignment Help Supply Chain Management
Reference no: EM1367628

Harley Davidson purchases components from three suppliers. Components purchased from Supplier A are priced at $ 5 each and used at the rate of 240,000 units per year.

Components purchased from Supplier B are priced at $ 4 each and are used at the rate of 30,000 units per year. Components purchased from Supplier C are priced at $ 5 each and used at the rate of 10,800 units per year. 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 $100 for each stop.

Thus, if Harley asks for a pickup from only one supplier, the trucking company charges $ 500; from two suppliers it charges $ 600; and fro m three suppliers it charges $ 700. Harley incurs a holding cost of 20% (of the price) for each component.

What is the minimal annual inventory cost of the new aggregate replenishment strategy?

What is the minimal annual inventory cost of the Harley's current strategy of ordering separately from each supplier?

How much is the saving resulted?

Reference no: EM1367628

Would it change the ceo''s decision

CCS has a holding cost of 30%. It currently uses a continuous review policy for managing inventory and aims for a cycle service level of 95%. Weekly demand has a mean of 1000

Language differences, government regulations, cultural diff.

Language differences, government regulations, cultural differences pose great ch allenges and risks to global sourcing. The benefits of global sourcing overshadow the risks:

Explain principle of supply chain management

Which of the following is not a principle of supply chain management? Choose one answer.Segment customers by service needs and then tailor services to those particular segment

Have you ever used spaghetti diagrams

We were able to reduce substantial travel time simply by moving equipment in the sequence it was needed in the process. QUESTION Have you ever used spaghetti diagrams or simil

Dangers of poorly communicating process

I strongly encourage that the communication be thorough and effective is long lasting sustainable changes are to be realized. QUESTION What are some of the dangers of poorly c

Financial and legal implications of international trade

Financial and legal implications of international trade focus on business and capitalisation of both companies, and how they would fit into chinas socio-economic system.

Lean thinking identify processes in organisation

LEAN THINKING  Identify processes in organisation you know well, that could benefit from the kind of changes introduced at Lantech. Explain how the improvements could be achi

Brief write-up explaining the correlation

Plots would be a nice way to graphically demonstrate, or you may submit a brief write-up explaining the correlation between the factors of fill rate and uncertainty on safety

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd