HP Deskjet Printer Supply Chain_Document.docx - 1 Develop an inventory model for managing the Desk Jet printers in Europe assuming that the Vancouver

HP Deskjet Printer Supply Chain_Document.docx - 1 Develop...

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1) Develop an inventory model for managing the Desk Jet printers in Europe assuming that the Vancouver plant continues to produce the six models sold in Europe. An inventory model (periodic review) for Vancouver plant was developed with a lead time of 5 weeks and review period of 1 week for both shipping and air. The periodic review method is more responsive to demand fluctuations than that of the existing method which is based on judgement using any rule of thumb. The level of change in the new model is relatively small when compared to the existing method (in case of transport using ships). The safety stock for the new model (both air and by ship) is less than that of the inventory maintained as per the current method. Ship Air Mean Std Dev Weekly Mean Weekly Std Dev Safety stock Output level Safety stock Output level A 42.3 32.4 9.73 15.54 78.05 136.46 45.06 64.53 AA 420.2 203.9 96.70 98.49 494.58 1074.80 285.54 478.95 AB 15830.1 5624.6 3643.09 2716.94 13642.99 35501.54 7876.78 15162.97 AQ 2301.2 1168.5 529.59 564.44 2834.31 6011.85 1636.39 2695.57 AU 4208 2204.6 968.42 1064.92 5347.46 11157.96 3087.36 5024.19 AY 306 103.1 70.42 49.80 250.08 672.61 144.38 285.23 23107.8 22647.46 54555.22 13075.52 23711.44 There is a significant difference in the safety stock level between ship and air transportation (if implemented) mainly because the difference in the lead time from 5 weeks to 1 week , also the safety stock inventory level reduced from 22647 to 13075 units which in turn will reduce various expenses such as holding and transportation cost. The detailed cost analysis is done for

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