1. Harley Davidson has its engine assembly plant in Milwauke and its motorcycle assembly plant in Pennysylvania. Engines are transported between the two plants using trucks, with each trip costing $1000. The motorcycle plant assembles and sells 300 motorcycles each day. Each engine costs $500; 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? 2. As part of its initative to implement just-in-time (JIT) manufacturing at the motorcycle assembly plant in exercise 1, Harley has reduced the number of engines loaded on each truck to 100. If each truck trip still costs $1000, how does this decision affect annual inventory costs at Harley? What should the cost of each truck be if a load of 100 engines is to be optimal for Harley?
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