Hewlett-Packard Company Deskjet Printer Supply Chain (a) - Solution and Recommendation

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Hewlett-Packard Company Deskjet Printer Supply Chain (A)

Table of Contents
Introduction:3
Problem identification:3
Recommendations and solution5
Strategies to be adapted:5
A.Postponement or Delayed Customization:5
B.R&D in Europe and Asia5
C.Investing in information:6
Strategies to be altered:6
I.Quick response can be used, along with improved and more accurate forecasting:6
II.Ordering quantity that would allow HP to provide a certain service level:6

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Introduction:
William Hewlett and David Packard with headquarters in Palo Alto, California founded Hewlett-Packard Company in 1939. HP diversifies its production into electronic test, measurement equipment and computers and peripherals products: in 1990, HP had over 50 operations worldwide with revenues of $13.2 billion and net income of $739 million. In 1988, the Deskjet printer was introduced and had become one of HP’s most successful products, with sales of 600,000 units/$400 million in 1990. -------------------------------------------------

Problem identification:
The high demand on the Deskjet printer increased the sales level as well as the inventory levels: in order to achieve a certain CSL, HP had to keep large inventories to respond to any fluctuations; they wanted to achieve a high level of responsiveness at a high holding cost. The organization in Europe was claiming that inventory levels there were low and needed to be raised in order to maintain satisfactory product availability. However, this addition in inventory levels would require from the distribution organization to track and store warehouses of inventory because the Vancouver Division couldn't build the right products in the right quantities. This problem would be solved since the European distribution suggested paying the extra cost of rental. David Arkadia, the Materials Manager at the Vancouver division, saw that they “just had to...
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