Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Management Expert

Harley Davidson purchases components from three suppliers. The components purchased from Supplier A are priced at $ 5 each and used at the rate of 240,000 units per year. The components purchased from Supplier B are priced at $ 4 each and are used at the rate of 30,000 units per year. The components purchased from Supplier C are priced at $ 5 each and used at the rate of 10,800 units per year. Presently 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 extra charge of $100 for each stop. Therefore, if Harley asks for a pickup from only one supplier, the trucking company charges $ 500; from two suppliers it charges $ 600; and from three suppliers it charges $ 700. Harley earns a holding cost of 20% (of the price) for each component.

a) Find out the minimal annual inventory cost of the new aggregate replenishment strategy?

b) Find out the minimal annual inventory cost of the Harley's present strategy of ordering separately from each supplier?

c) How much is the saving resulted?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92826

Have any Question? 


Related Questions in Financial Management

You purchase 25 call option contracts with a strike price

You purchase 25 call option contracts with a strike price of $135 and a premium of $1.80. Assume the stock price at expiration is $142.46. 1.  What is your dollar profit? 2.  What if the stock price is $128.41? (Negative ...

The bivariate ma4 model xtnbsp atnbsp- theta4at-4nbspis

The bivariate MA(4) model x t  = a t  - Θ 4 a t-4  is another seasonal model with periodicity 4, where {at} is a sequence of independent and identically distributed normal random vectors with mean zero and covariance mat ...

How does the fed calculate m1 m2 and dnfdare these

How does the Fed calculate M1, M2, and DNFD? Are these aggregates all money? Why or why not? Which contains the most liquid assets? Which is smallest? Which is largest? Which monetary aggregate is most closely associated ...

Consider all that you have learned in this coursehow can

Consider all that you have learned in this course. How can you apply what you have learned? Look at the financial statements or perform basic research on your current or previous employer. What can you deduce about their ...

Suppose the real risk-free rate is 350 the average future

Suppose the real risk-free rate is 3.50%, the average future inflation rate is 2.50%, a maturity premium of 0.20% per year to maturity applies, i.e., MRP = 0.20%(t), where t is the number of years to maturity. Suppose al ...

A trader at a us bank believes that the euro will

A trader at a U.S. bank believes that the euro will strengthen substantially in exchangerate value during the next hour. How would the trader use the interbank market to attempt to profit from her belief ?

Financial managementplease discuss and analyze one of the

FINANCIAL MANAGEMENT Please, discuss and analyze one of the following two topics (your choice of topic). Be sure to state an opinion and defend your stance: 3-5 pages. Topic 1: There seems to be an escalation of non-bind ...

Interview a few people who are not economists but who are

Interview a few people who are not economists but who are old enough to remember the 1970s. Ask them what caused the high inflation of the 1970s and the deep recession of the early 1980s. Also ask about the 1990s: Why wa ...

Consider the daily simple returns of ibm stock from 1962 to

Consider the daily simple returns of IBM stock from 1962 to 2002 in the file d-ibmvwew6202.txt. Compute the first 100 lags of the ACF of the absolute daily simple returns of IBM stock. Is there evidence of long-range dep ...

Suppose the fed wants to reduce the money supply by

Suppose the Fed wants to reduce the money supply by $100. Should it buy or sell government bonds? How much should it buy or sell?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate