Supply Chain Management Assignment - Essay Example

Download file to see previous pages 277, 303 units divided by the number of months. The ordering cost of producing each printer incurred by the company is stated to be $250. Based on the above data the carrying cost of each of the several units is assumed to be around $21. Moreover the lead time required to dispatch the products from the Vancouver centre to the European Distribution Centers is observed to be 35 days. Given the above conditions the economic order quantity that ought to be produced by the firm can be calculated as: Square Root of (2 * Average Demand* Cost of Order/ Cost of Carrying) or it arrives to under Square Root of (2* 23109* 250/21). Herein the Economic Order Quantity based on the above model turns out to be 742 units approx. The cost of production of each unit by the company is observed to be given as $250. Thus the yearly investment based on the economic quantity calculated comes to around $250 * 742 units i.e. $185,500 on an average. A.2. The calculation of economic order quantity would help the company in reducing the cost pertaining to the production of DeskJet printers through the management of the flow of raw materials. The calculation of economic order quantity would also help the management in reducing the level of distribution costs of the printer gadgets from Vancouver to the European Distribution Centers. ...
Less amount of working capital would be expended or locked for the above reason and thus would help the company gain more profits. Further the problems relating to effective stock management in regards to the delivery of the same from the Vancouver center to the European distribution houses can be effectively managed in which the issues relating to piling up or shortage of stock in some quarters can be effectively addressed. Thus by depending on the above model of economic order quantity the company can both manage the level of inventory flow from Vancouver to the European distribution houses and also the cost factor related to such (Chase et. al, 684). A.3. The Company focuses on making the DeskJet printers more customized through the modification conducted in the technical aspects of the products to help intake lesser voltage. This process of customization is conducted in the several European distribution centers where separate installations are made inside the printer to help the local population gain advantage from spending less power on such products. The cost of power being saved would help to enhance the demand for the same in the local markets and thus would also help the company to gain large amount of business profits. Moreover the factor of consumer loyalty would also be enhanced based on the above reason wherein the consumers would aptly feel cared by the company in helping them reduce the costs related to power usage. Again Hewlett Packard also helps to enhance the process of customization or localization through the rendering of manuals pertaining to the use of the gadgets inside the packaging boxes. These manuals would be written specifically in local languages which would help the local people ...Download file to see next pagesRead More