# Hewlett packard case questions 1 develop a new

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Hewlett Packard Case Questions1.Develop a new inventory system to manage DeskJet printersin Europe that meets HP service level requirements (98%) and minimizes costs.2.Comment on the cost and effectiveness in meeting service level requirements of the current policy vs proposed (Question 1). 3.Evaluate supplying standard (generic) printers to Europe andfinishing the product at the European DC.4.Evaluate whether HP should fly printers to Europe5.What is your recommendation to HP
Hewlett Packard Case17-20
HP Case Product FlowWhere is the inventory?What are the reasons for inventory?What inventory costs you need to consider?What drives inventory costs?What might the cost formula look like?Final Assembly and TestingVancouverEuropean Distribution Center5 weeks on a shipTo Customer
Hewlett Packard Case CriteriaTwo criteria you want to satisfy in this case are: 1.Minimize annual inventory costs = (Safetystock(SS)+Pipeline(PL)+Cycle Stock(CS))x(unit cost) (percent carrying cost).2.Meet service level requirement of 98%SS= Z value * standard deviation of the exposure period (T+L)Z value for service level of 98%= 2.06PL= Inventory in transitCS = Average weekly order/2
Hewlett Packard AssignmentAverage Value of Inventory
Hewlett Packard Case Demand Data is presented Monthly You need to convert it to WeeklyEurope OptionsNOVDECJANFEBMARAPRAMeanStd. DevAB20,57220,89519,25211,05219,86420,316158305624.6
Calculating Safety StockSS safety stock = In this case is the standard deviation of demand over exposure period (T+L) Determining std dev of 6 weeks demand requires 3 steps: (1) a calculation to determine the std dev for a one week period (formula 17.7). In this case it is the std dev for the monthly demand/ Square root of 4.33 (there are 4.33 weeks in a month) (2) a calculation to determine the std dev for a 6 week period. (formula 17.7) In this case it is the std dev of the weekly demand (calculated in (1) above x the square root of 6 ( there are 6 weeks in the exposure period) (3) multiply the std dev of the exposure period and the z level for 98% availability (2.06) L+TZL+T
Hewlett Packard AssignmentQuestion 1HP has 6 products they ship from Vancouver to Europe. HP has a policy of holding 1 month demand average inventory in the Europe DC of each product. This has not worked effectively for them. Develop an inventory system (model) using fixed time period ordering which results in lowest total cost: Determine the:The average inventory for each product including safety stock, cycle stock & pipeline stock (Inventory on ships) The total inventory cost
Hewlett Packard Assignment