MGMT 66400: Supply Chain Management Spring 2020 Group Assignment- 3Hewlett-Packard Co.: DeskJet Printer Supply Chain Case StudyPlease submit a report addressing the questions below. Also, submit the excel spreadsheet that you have used:1. What are the pros and cons of the following proposals mentioned in the A case: an European factory, better forecasting, more inventory? ANS- Hewlett-Packard was facing two main issues- ●They were striving to deduce a method / strategy to manage inventory in such a way that availability of product is ensured at all times while maintaining minimal inventory.●HP also wants to ensure that the parties reach consensus on the level of inventory to be maintained.Opening a new factory in Europeseems to be one of the possible solutions to the above- mentioned issues.On the basis of available data, we present the following analysis,PROS●Process called ‘Localization’is required for the DeskJet printers that are sold in Europe. This is to ensure compatibility of- the language of the module, voltage requirements (110 or 220) mentioned in the power supply module and power cord terminator (plug) with thecountry in which it is sold. A factory in Europe will be more efficient and smooth in ensuring that these local needs of the European country are satisfied at the final stage. This will greatly reduce efforts of American factories. It will also ensure increased customer satisfactionamong Europeanbuyers.●Complications related to customs and long lead time due to ocean shipment from US to Europe and Asia can be eliminated with the opening of a factory. Also, Europe lies in the middle of the US and Asia, so the transportation cost and lead time will be drastically minimizedfor the shipments to Asia.●It will help in establishing a strong base in Europefor the future and give an edge over the existing competitors in Europe.
●Initial assembly which is done at a factory in the US can be done at the factory in Europe and then sent to DC in Europe. This willreduce workload from American factoriesandthey focus more effectively on their local demand fulfilment.CONS●Building a factory in Europe will indubitably require heavy investment. There will be a huge cost of buildingand cost incurred in operation of the new plant.●More human capital cost●There is no efficient method to forecast future demands and possible growth in Europe, therefore there is uncertainty in that aspect. We cannot be sure if the company will be able to break even the investment it makes in the Europe plant.Improving the forecasting systemis another feasible solution but has certain pros and cons:PROS●Can reduce demand uncertainty.●The improved version of the forecasting system could also help in achieving the target service level of 98%at European DC.