CASE STUDY Should Packing Be Postponed to the DC$?$ Penang Electronics $($PE$)$ is a contract manufacturer that prev produces and packages private$-$label products for sevcrm retail chains, including Target, Best Buy, Staples Office Max. In each case, the basic products are and ing and are identi$-$ of the used manu$-$ facturing facility replenishes a DC in St$.$ Louis, from The manufacturing and transportation lead time L$,$ with the only difference being the labeling and the corn packaging. Thus, the labeled and packed version product destined for Target cannot be sent to Best Buy wer DC Currently, a production facility in Malaysia is to manufacture. label, and pack all products. The from ich the contract manufacturer fills all customer prod ing ing from Penang to St$.$ Louis is nine weeks. FE uses a com$-$ tinuous and ai review policy to manage inventories at its DC that aims to provide a cycle service level of $95$ percent the stan for each product to every customer com The previous month had been very challenging ecause Best Buy requested $5,000$ additional units cou beyond what was available at the DC$,$ whereas Target ordered $3,500$ fewer units and Staples ordered $4,000$ fewer units. Even though there was sufficient product inventory available at the DC $($in the form of the basic product$),$ PE could not meet the Best Buy request because excess inventory available was labeled and packed for other customers. The DC had leftover inventory from Target and Staples, which unfortunately could not be used to serve Best Buy. PE had lost business and surplus inventory all because of the wrong labels and packaging. Eva To e ing ing use anal for anal prin from Bes the cas $"$SD All inc prin Labeling and Packaging at the DC The vice president of supply chain at PE proposed post$-$ logic was that postponing labeling and packaging to the ny customer. In particular, the situation that arose in the poning the final labeling and packaging to the DC$.$ Her thes mal DC would allow PE to use all available inventories to serve im ing