HP case study solution - HP DeskJet Printer Supply Chain Implementation of Risk Pooling Strategy by shifting localisation process to DCs The Key problem

HP case study solution - HP DeskJet Printer Supply Chain...

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HP DeskJet Printer Supply Chain Implementation of Risk Pooling Strategy by shifting localisation process to DC’s: The Key problem that HP is facing right now is huge demand uncertainty from its customers leading to many other problems like high inventories, low service levels to its customers, poor forecasting techniques owing to variability in demand, uncertain safety stock levels etc. The root cause as observed by them is the uncertainty in demand of the products in their Deskjet printer product line. Considering its current scenario, one of the solutions can be adopting a risk pooling strategy to overcome its problems. Risk Pooling suggests that the demand variability can be reduced by aggregating the demand over locations, products etc. Currently, HP deskjet has 6 SKU’s that go into the European market and if the monthly coefficient of variation of each and every product is considered, it varies from as low as 0.34 to as high as 0.76. The Risk pooling can reduce the overall coefficient of variation to 0.27

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