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lecture19 notes - HP Printer Case Management in Engineering...

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HP Printer Case Management in Engineering November 14, 2012 Dr. Abbott Weiss, Senior Lecturer
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What do you recommend HP should do? Universal power supply » Yes ? » No ? Why? 11/17/12 2
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Mfg. Eng. Mktg. Controller HP managers around the table Prod. Design 11/17/12 3
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Measurements and Behavior Five functional managers are discussed in the case: a.) Marketing b.) Product Design & Development c.) Finance d.) Manufacturing Engineering e.) Distribution Distribution How are they measured? How does it influence their views on the universal power supply? 11/17/12 4
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Universal Power Supply - Costs & Benefits Costs Benefits higher cost per unit = $50 lengthen Break-Even Time (BET)? problems allocating supply increase forecast accuracy fewer stockouts fewer lost sales less safety stock required fewer expedited shipments eliminates re-configuration work 11/17/12 5
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Key Consequences of this Decision 11/17/12 6
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Probability of Worldwide Demand HP Network Printer Demand Worldwide 60% 50% 40% 30% 20% 10% 0% 50% Average demand = 25,000 per month Average forecast error = 40% at maturity 31% 31% 16% 16% 1% 2% 7% 7% 2% 1% - 10,000 20,000 30,000 40,000 50,000 60,000 Monthly Demand in Units 11/17/12 7 Probability of Monthly Demand
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Cumulative Demand Probability Curve HP Network Printer Demand - Cumulative Probability 1% 2% 7% 16% 31% 50% 69% 84% 93% 98% 99% 0% 20% 40% 60% 80% 100% 120% - 10,000 20,000 30,000 40,000 50,000 60,000 at least this Monthly Demand Worldwide Cumulative Probability of Demand Average demand = 25,000 per month Average forecast error = 40% at maturity 2 Standard Deviations gives 98% coverage of possible forecast maxima.
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lecture19 notes - HP Printer Case Management in Engineering...

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