100%(9)9 out of 9 people found this document helpful
This preview shows page 1 - 8 out of 18 pages.
COMM 204 Logistics and Operations Management Supply Chain Management HP Case and Postponement 1
HP Deskjet Case 2
HP Deskjet Case: Background •Manufacturing in Vancouver WA –High volume, high speed –Many different models •3 DC’s: North America, Asia, Europe –simple standardized process •Transportation lead times –Europe & Asia: 5 weeks –US: 1 day 3
HP Deskjet Case: Analysis •What are HP’s options? 4 Problem (Europe) Causes •High inventory levels •Low product availability
HP Deskjet Case: Options •Rationalize Safety Stock 5 •More inventory •European factory •Air shipment •Better forecasting •DC localization Short Term Options Long Term Options
HP Deskjet Case Safety Stock Rationalization •Monthly Demand 6 BRAND Monthly Demand Mean Standard Dev A 42.3 32.4 AB 15830.1 5624.6 AU 4208.0 2204.6 AA 420.2 203.9 AQ 2301.2 1168.5 AY 306.8 103.1
HP Deskjet Case Safety Stock Rationalization •Example: Europe AB –Monthly mean 15830.1 and std 5624.6 •What should be safety stock assuming weekly replenishment and 98% service level?