Hence the lead time in this case is only 1 week. Other Hints to the Case: In comparing different options e.
If the lead time is 5 weeks with sea freight and 1 week by air, and if the review period is 1 week because of production cycles at the factory, what savings in average inventory are available?
Question 3:Evaluate the idea of supplying generic printers to the Europe DC and integrating the product by packaging the power supply and the instruction manual at the DC just prior to delivery to the European re sellers.
Annual Demand D Ave. The Safety Stock week of supplies decreases from 5.
Using the data in the previous slide, apply your model and calculate the expected yearly investment in DeskJet printer inventory in Europe DC. Transportation time from Vancouver to EU takes a long 5 weeks.
The generic model is worth taking into consideration, because it decreases the amount of inventory and, as a result, costs.
What is your recommendation to HP? I tell you, air freight is expensive, but it is worth it. Inventory in Europe EU needs to be raised even further to maintain satisfactory product availability.
With that, it would also create higher local market presence because they will have the capability to meet the local standards in terms of language, electrical specifications, etc. Question 4: What is your recommendation to HP?