Hewlett Packard DeskJet Printer Supply Chain Essay Example

Hewlett Packard: DeskJet Printer Supply Chain Essay 1. What caused the so-called Inventory/Service crisis?The perceived problem from Vancouver manufacturing centers view point is the European Distribution Centers poor forecast accuracy. The perceived problem from European distribution centers view point is that the manufacturing center requires too long of a lead time. As a result, some localized product lines within the European distribution center are out of stock, while other product lines have excess inventory.The causes of the stock overage and underage are as follows:- A 6 week replenishment lead time to get a product from the Vancouver manufacturer to European distributor is relatively long for a high-volume consumer good, particularly relative to the 8 days it takes to get product to the U.S. distribution center. (For Europe, it takes 1 week for manufacturing and 5 weeks for shipping.)- The Vancouver manufacturer currently must produce many skus, which vary by low cost modular components that mate with a much more costly, gene ric component. The distribution centers exist on three continents, each with several more localized configurations.- The players within the supply chain, the Vancouver manufacturer and the European distribution center, have a narrow view of their respective roles and have inflexible policies. Vancouver manufacturer operates only as a manufacturer, and hence, optimizes its operation to hold no inventory. Meanwhile, the European distribution center operates only as a distributor, and therefore only manages inventory levels and will not perform any assembly work. If both players would broaden their viewpoints to the entire supply chain, then they could perform final, localization assembly tasks at optimal points in the supply chain to minimize stock outages or overages. Essentially, it is optimal to postpone localization assembly until the moment demand for a localized configuration is known, which is in the European distribution center, closest to the customers that drive demand.Risk pooling would take place within the European distribution center to greatly reduce the safety stock for low-volume product lines (for small countries) where demand is most variable.2a. What are the different alternatives available to Brent to address the inventory/service crisis? What are the advantages and disadvantages of each?The alternatives to address the inventory/service crisis are as follows:Alternative 1: Ship to European distribution center by air rather than by sea:- Advantages: Considering all the models Safety stock is 5445 units lower when shipping by air to Europe- Disadvantages: Total costs of supply chain is $3,322,016 more when shipping by air to Europe.Alternative 2: Perform final assembly for localization in Europes distribution center.- Advantage: Risks are pooled across all lines in the European distribution center, thus reducing the required safety stock, particularly for low-volume skus going to small countries.- Disadvantage: European distribution center wou ld have to stock localized items separately, and would have to change processes to accommodate assembly tasks.Alternative 3: Since both players are within the same company, they could switch from a periodic review to a continuous review via online data exchange to reduce order lead time as well as order cost.Advantages: Order lead time and costs would be reduced, and both players would benefit.Disadvantages: Minimal, aside from process change.Alternative 4: To further reduce total cost of operation, HP may want to further consolidate all languages within a single manual, standardize the power supply, leaving only the power cord and a voltage regulator switch as the variables for localization. The costs per manual and per power supply may increase, but the more generic units allow assembly costs to be reduced and risks to be pooled, thus reducing inventory costs (i.e., safety stock).Advantages: Though Bill of Material is not provided in the case, stocking localized manual and power c ords is less expensive than stocking entirely localized skus.Disadvantages: Cost per manual and per power supply may increase.2b. Consider a periodic-review, order-up-to model to evaluate the various alternatives available (air shipping and ocean shipping) to Brent Cartier to address the inventory and service problem. Use the same methods to evaluate the inventory savings associated with a generic European product that would be assembled-to-order in the European distribution center under each shipping option.2c. If you were Brent Cartier, what would you recommend? How would you expect the different stakeholders to feel about this proposal? How would you sell your recommendation to these stakeholders?Answer:Specifically, HP should postpone localization assembly until the moment demand for a localized configuration is known, which is in the European distribution center, closest to the customers that drive demand.We would expect Vancouver manufacturing team to protest against Distribut ion centers performing assembly, as they would think they would be losing control on the manufacturing. They would think why the distribution centers, who cannot provide proper forecast are taking away some of their tasks. The European distribution center (and other DCs) would feel changing the processes is not warranted and the inventory management should be a shared responsibility of Vancouver Manufacturing center with the DCs. They wouldnt be comfortable to change the processes in order to perform final localization assembly tasks.We would sell the recommendation by emphasizing the total cost of operation will decrease, and risks can be pooled closer to the source of variable demand in order to prevent stock outs and overages. We would further assert that the Vancouver manufacturer and European distribution channel must broaden their viewpoints in order to optimize operations across the entire supply chain.We also recommend HP continue to ship to European distribution center by s ea as we can see from Appendix , from overall supply chain cost perspective, shipping by Sea is a cheaper option compared to shipping by Air. We would recommend shipping by air only if costs of a stock out offset costs air freight, and to prevent any customer satisfaction issues.To further reduce total cost of operation, HP should consider further consolidation of all languages within a single manual, standardize the power supply, leaving only the power cord and a voltage regulator switch as the variables for localization. The costs per manual and per power supply may increase, but the more generic units allow assembly costs to be reduced and risks to be pooled, thus reducing inventory costs (i.e., safety stock).For the following two questions, consider only option AB solid in Europe:2d. The Marketing Department is concerned about increasing competition from other manufacturers and ha proposed that the target fill rate for all products be raised to 99.5%. What is the incremental ave rage annual cost of attaining the higher target service level for option AB, assuming all products are shipped by sea?Answer: Option ABs incremental average annual cost is $371,225.10 by increasing the safety stock by 3,569 units, which is a 6.43%.2e. A detailed market study shows that only a small segment of the Europenan market representing 30% of sale, requires 99.5% fill rate. HP can maintain its competitive position in the rest of the European market with its current 98% service level. The Logistics Department has proposed a differentiated service policy whereby inventory is physically separated and allocated to each of the two market segments in order to achieve the 99.5% and 98% fill rates, respectively. (Consider the distribution demand for each region.) What is the cost impact of such a policy, compared with the current practice of providing the higher service level to all customers (such as the previous question)? (Assume that all products are shipped by sea). Should this practice be adopted?Answer: The required safety stock increases when providing service level at differential fill rates and costs increase by 6.38%. Whenever variability is divided into more parts, variability overall increases because risks are no longer pooled. We would not recommend this policy segmenting fill rates as costs would increase, unless the customer was willing to compensate us for the costs.

History of Exxon-Mobil Oil Company

History of Exxon-Mobil Oil Company To trace the history of Exxon-Mobil Oil Corporation, we first need to go back to the formation of Standard Oil Company. John D. Rockefeller incorporated this company with Henry Flagler in 1870, and until it was broken up Standard oil was the largest, most profitable business in the world. However, in 1911, Standard Oil was forced to break up into 34 separate, unrelated companies by the Supreme Court.Mobil Chemical Company was not formed until 1960 from Socony-Vacuum Corporation, which was made up of two separate companies in the first half of the 20th century. In 1976, Mobil Oil Corporation became the official name for Socony-Vacuum Corporation. From there Mobil went on to be the most influential Oil company in the entire world, along with Exxon. In 1984, Exxon Oil company topped the $100 billion mark for revenues for the first time. Exxon went on expanding until The Valdez Oil spill in 1989 off the small port city of Valdez, Alaska.Exxon gas pumps have issuesFinally, in 1999, Exxon and Mobil joined to form Exxon Mobil corporation. The merger shaved off approximately $4.6 billion every year in costs.The merging of these two companies combined not only two enormous oil companies, but two entirely separate corporate cultures as well. Exxon had always been much stronger in finance and engineering than Mobil, and Mobil had always been, historically, a marketing giant and one of the best deal-cutting businesses of the late 20th century. Exxon was by far the more rigid of the two corporate cultures, being led by Lee Raymond to this point. Lucio A. Noto, the head of Mobil, was known for his charm and energy more than anything else, became the figurehead for the much more relaxed culture of Mobil.In general, the Mobil executives were serving under the Exxon executives,

Contemporary Auditing Essay Example | Topics and Well Written Essays - 500 words

Contemporary Auditing - Essay Example and more over it needs a three party relationship that is an auditor [approved and appointed by the Government authority], client and the management. Where as in the other services independent professionals approved by the CPA would carry out the service. Mainly the customers determine the economy of the nation, the aim of any organisation is focused at satisfying the customers, so that the targeted economy could be maintained all the time. The need for satisfying the customers has become a compulsory and necessary requirement to win over the competencies. This is the running economic issue through out the world. Organisations and clients are looking out for reliable information rather than the one obtained through evaluation or investigation. An assurance service is guided by the CPA which include independent verification of the data over which an expanded and reliable and variety of information is provided, as a result the job of decision-making becomes easy .At present satisfying the needs of the customers and improving, the strategies have become important concerns of organisations. To achieve the goals and strategies an assurance service will help the organisations as well as the customers to get assurance over the objectives. So the demand has increased for assurance services rather than for other services. Assurance engagement is a type of commitment taken by the service provider who would make critical reasoning of the issues involved in decision-making. Which as a result will bring together the client and the service provider, in which the latter will give his suggestions for new services to see whether the goals are achieved or not. More over an assurance engagement will include a deep evaluation of the objectives, and formulates best and informative solutions and suggests for further improvement in performance. As attestation engagement service includes the job of reviewing the