Essay Hewlett Packard Case Study

637 Words3 Pages
Hewlett-Packard Case Study

Hewlett-Packard (HP) can attribute much of their success to their initiation of the DeskJet printer in 1988. In 1990, even with success of increased sales, concerns had arisen over growing inventory levels in the European distribution centers. This concern was raised due to the fact that they inventory had “tracked sales growth closely” (Chase, Jacobs, and Aquilano, 2005, p. 625).

In the HP cast study, the Supply Chain shows the DeskJet product is manufactured prior to being shipped to the distribution centers in the various overseas locations. The products are customized prior to shipping to the distribution centers; therefore, inventories cannot be shared due to the localization. The concern with this
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The aggregate production plan feeds into the master production schedule, which then provides input into the material requirements plan. Capacity planning will influence the aggregate plan for production (Heizer and Render, 2007).

Holding costs take into consideration the costs that HP will acquire for storing the items, depreciation of the printers, any product damage, costs associated with insurance and taxes and the depreciation of items. The company will need to use successful forecasting to insure effective management of sizes of inventory (Chase, Jacobs, and Aquilano, 2005, p. 590).

The concepts of effective forecasting discussed in this case can be applied to the servicing strategies in many companies. Without effective forecasting, proper staffing would not be accomplished and the volume of incoming calls would be unmanageable. The technique of time series analysis is effective in maintaining efficient productivity.

Recommendations for HP are that the business needs a shorter lead-time and perhaps needs to re-evaluate how they transport the product to the distribution centers. They might want to consider a faster method. Also, the inventory backlog could be caused from the final assembly and test (FAT) facilities manufacturing too many products, which are localized, prior to sending it off to the distribution centers. This could be the

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