Hewlett-Packard Deskjet Printer Case - Discussion Guide - RG - 18 Sept 2005 - Inventory-Service Crisis What crisis inventory imbalance i.e some product

Hewlett-Packard Deskjet Printer Case - Discussion Guide - RG - 18 Sept 2005

This preview shows page 1 - 5 out of 10 pages.

Inventory-Service Crisis What crisis: inventory imbalance, i.e., some product options having excess inventory while some others have shortages. What caused it: many product options due to geography, long DC replenishment lead time, highly uncertain market, inflexible design : not easy to rework one option to make it into another, out of control inventory system, uncoordinated functional interests (manufacturing, distribution, marketing, engineering )
Image of page 1
Curse of Product Variety High inventory Poor customer service High manufacturing cost High cost of after-sales support Forecasting nightmare High obsolescence at end-of-life
Image of page 2
High overhead support Short Term : Rationalize Safety Stock Inventory control system used: Periodic review, order-up-to system. Key drivers of safety stock: 1. Service target 2. Variability: Std deviation of demand
Image of page 3
3. Lead time 3. Review period Safety Stock Example: Europe Option AB Safety stock = Safety factor *Std. Dev of exposure demand (Lead time + Review Period)*Std. Dev of Demand
Image of page 4
Image of page 5

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture