One For The Books! This case involves high-tech giant Hewlett-Packard (HP), one of the world's leaders in the production of computer printers.

The problem appeared in 1990, two years after HP introduced its popular line of DeskJet printers. In that brief time, sales topped more than 600,000 units valued at $400 million. Already, however, HP was running into serious inventory snags, particularly with services to its European customers. Production took place in the Vancouver, Washington, regional HQ's of the company's personal printer group. The printers were shipped to Europe by water. Unfortunately, that resulted in long lead times, making it tough for HP to accurately forecast demand.

HP found itself running short of production for certain customers while at the same time renting trailers outside the European distribution center to handle excess inventories. Matters were further complicated because each destination country had its own power-supply requirements based on prevailing voltage levels, and manuals had to be in the local language. Figuring out how much product to ship to each market was proving next to impossible for Vancouver.

A number of options were available to HP. It could devise a complicated new methodology for projecting safety stocks. It could increase inventory in Europe, causing significant overages of product in some areas. It could cut inventory, angering customers and sales offices even more. It could set up manufacturing in Europe, an expensive move that might not be justified by sales volume. Or it could ship by air, another pricey option.

REQUIREMENT:

What would you recommend to resolve the issues at hand. There is more than one solution.

Do not simply tell me you'll ship by air and install a new software or production line. I expect some specific detailed solutions, why would your recommendations work.

Keep in mind, transit time, costs, and think about all the logistical functions studied thus far. Think about inventory posture, costs, transportation, packaging, product design, so forth. The above mentioned opportunities are not the only ones available to resolve this case.