ESI 6323 HW6 Word document

# ESI 6323 HW6 Word document - -11 How many engines should...

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-1 1. How many engines should Harley load onto each truck? Use Equation 10.5: Annual demand, D = 365 300 × = 109,500 units Order cost per lot, S = \$1,000 Unit cost per engine, C = \$500 Holding cost per year as a fraction of inventory value, h = 0.2 Optimal order size = 480 , 1 500 2 . 0 1000 500 , 109 2 2 * = × × = = hC DS Q Note: 49 . 986 , 897 , 54 \$ 500 2 . 0 2 480 , 1 000 , 1 480 , 1 500 , 109 500 , 109 500 : 480 , 1 = × × + × + × = = TC Q 49 . 986 , 897 , 54 \$ 51 . 986 , 897 , 54 \$ 49 . 986 , 897 , 54 \$ 500 2 . 0 2 479 , 1 000 , 1 479 , 1 500 , 109 500 , 109 500 : 479 , 1 = = × × + × + × = = TC Q 49 . 986 , 897 , 54 \$ 53 . 986 , 897 , 54 \$ 49 . 986 , 897 , 54 \$ 500 2 . 0 2 481 , 1 000 , 1 481 , 1 500 , 109 500 , 109 500 : 481 , 1 = = × × + × + × = = TC Q What is the cycle inventory of engines at Harley? Use Equation 10.1: Cycle inventory = 740 2 480 , 1 2 * = = Q

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2. How does this decision impact annual inventory costs at Harley? Using Q = 1,480: 986 , 147 \$ 500 2 . 0 2 480 , 1 000 , 1 480 , 1 500 , 109 2 = × × + × = + hC Q S Q D Using Q = 100: 000 , 100 , 1 \$ 500 2 . 0 2 100 000 , 1 100 500 , 109 2 = × × + × = + hC Q S Q D Annual inventory costs would increase by \$952,014, an increase of over 643%. What should the cost of each truck be if a load of 100 engines is to be optimal for Harley? Use Equation 10.5 (solved for
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## This note was uploaded on 05/12/2010 for the course ESI 6323 taught by Professor Guan during the Summer '09 term at University of Florida.

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ESI 6323 HW6 Word document - -11 How many engines should...

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