Topic > Case Analysis of Hewlett Packard - 1657

Another observation from the model is that the demand for the AB option is very high compared to the other options. An alternative to avoid losing consumers of this product and at the same time counteract the uncertainties of AB product demand, HP could ship AB products by air. Before committing to air shipping just for the AB product option, the company should first check whether it is the AB option that the DC in Europe falls short of. If so, what are the costs associated with losing that sale? If the costs associated with losing customers in that segment were very high compared to the costs associated with air shipping, HP could air-ship the product for which demand is very high. In the current process, localization is done in the factory and then shipped. The distribution centers that print shops deal with only follow a standardized process that involves: receiving products from various suppliers and storing them, picking to fulfill customer orders, shrink wrapping completed orders, labeling and shipping the order. These DC centers do not have the equipment nor the expertise to accommodate "integration" or manufacturing (assembly)