Hp Case Essay
Allada Prasanth (1211087)
Ishan Puri (1211100)
Manish Pathak (1211113)
Sarang Bhawre (1211139)
Hewlett-Packard (HP) Company was founded in 1939 with headquarters at Palo Alta, California. It grew steadily over the next fifty years, diversifying from its base in electronic test and measurement equipment into computers and peripherals products which now dominated their sales. The Peripherals Group was the second largest of HP’s six product groups, with 1990 revenue of $4.1 billion. The Peripherals Group had set technological standards such as disposable …show more content…
There is a mismatch of inventory vis-à-vis demand at the Europe DCs due to: * Volatile monthly demand across the different product models in Europe * Poor demand forecasting * Zero-inventory policy of the Vancouver
This meant that there was excessive inventory for some products while shortages for others. This was being compounded by the relatively long duration of shipment (4-5 weeks) by sea. Our aim is to cater to this volatile demand, while keeping costs as low as possible.
The purpose of this analysis is to come up with recommendations to: * Minimize inventory in Europe DCs and track the demand better * Minimize distribution costs (Warehousing + Freight) to European Region * Maintaining desired serviceability levels (98%)
The following are the changes that can be made to the existing system to address the inventory and service problems: 1. Set up a sister plant in Europe which takes care of the final assembly i.e. 2. Change the mode of transport from sea to air freight.
Taking the above two choices into consideration, we have the following options at our disposal 1. Manufacture the product in USA and ship through sea. 2. Manufacture the product in USA and ship through air. 3. Setup a plant in Europe which reduces shipping costs as well as the lead time.
1) The reasons for the inventory service crisis are as follows: 1. Inaccurate demand forecasting 2. High