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In: Business and Management

Submitted By ecchan03
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CASE: Hewlett-Packard Company: Network Printer Design for Universality (p. 358-363)

Question 1

It allows HP to postpone (product standardization, postponement) the allocation of laser printers (or specification of printer engine) to specific regions by about two months. Thus, in these two months the decisions can be made based on the aggregate demand forecast (US & Europe) in all regions. Production team believes universal power supply can enable HP to better respond to regional demand (US & Europe) and reduce its inventory costs.

Question 2

1. Disadvantages / costs of the universal power supply include:

i. Increase material cost (USD 30/unit) ii. Possible power play among warehouses / Distribution centers (DCs) when transshipment is facilitated by the use of the universal power supply.

2. Advantages of the universal power supply include:

i. Improved forecast accuracy ii. Less frequent (and cost of) stock-outs due to improved forecasting (especially at the beginning – product ramp-up stage - of the PLC) and risk pooling (for both US & Europe). iii. Lower safety stocks and inventory holding costs for a given service level due to improved forecasting. iv. Lower transshipment costs (approx. conservative estimate $250 (re-configuration) per printer - because expensive rework can be avoided, and safety and conformance regulations (Underwriter’ Laboratory certification process costs) can be eliminated.
v. Easier transshipment (less hassle free, as eliminates tedious & complex reconfiguration of the power supply, fuser electronic circuit & fuser bulb at Europe). The only customization is the addition of language manuals and plug adapter at the DC. vi. Easier product planning (less likelihood of just in case management for inventory) vii. Eliminate quality costs associated with re-configuration. Maintaining a controlled process could be...

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