Keeping Vancouver plant as the manufacturing plant The company would keep on

Keeping vancouver plant as the manufacturing plant

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Keeping Vancouver plant as the manufacturing plant- The company would keep on manufacturing the Deskjet printers at the Vancouver plant and can used the safety stock level as analysed for different Distribution centres such as Europe , Asia Pacific and North America. This would ensure the appropriate amount of stock which is to be kept by each Distribution Centre to avoid unnecessary inventory holding cost or the situation of stock- out. Sometime, goods would also be transported via Airways in case of any emergency in the all three distribution centres. Merits:- Fulfillment of demand of product as there will be safety stock to avoid stock-out situation at different distribution centres. Low inventory holding cost. Customer satisfaction with the product availability. Low risk stock-out due to demand uncertainty with transportation of goods via air. Demerits:- High cost of transportation via air. Establishing new manufacturing plant – The company would establish a new manufacturing plant of Deskjet printers in order to fulfill the demand of the Europe and Asia Pacific. The plant would be established in Asia as there will be the benefit of low labour cost in Asia. Hence, the new plant will help in reducing the lead time for the goods and proper safety stock at Europe and Asia-Pacific Distribution Centres. Merits:- Low cost of production of goods. Low inventory holding costs. Low transportation costs. Fulfillment of demand of safety stock. Reduced lead time. Demerits:- Huge cost of investment to establish new plant. Increased burden of the company. Increased expenses for running the plant. Using airways as the mode of shipment of goods- The company would use the airways to transport goods to Europe and Asia Pacific permanently from the Vancouver manufacturing plant and use current safety stock cycle.
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