Hp Case

Hewlett-Packard Case

1. Jane Schushinski, the marketing manager, who has the biggest incentive to have the universal power supply (U.P.S.) come to fruition, would like to see U.P.S. implemented if it does not add to the cost of the product. (According to Hooper, it will add to the cost in the amount of $30 per unit.) Jane realizes that customers will not pay for a feature, which does not benefit them. This leads to a second question, who will pay for the additional $30 per unit – HP, the retailer? The managers need to come to a consensus regarding this issue as well as others that will be mentioned later. Jane’s motivation to see the U.P.S. implemented is due to the difficulty in forecasting demand for North American and European printers, which are currently differentiated, based on power supply, 110 Volts and 220V. Jane makes a interesting comment when she states their prediction that North America will have about 60% of the market. If that is the case, why would H.P. go ahead with the U.P.S.? The problem is, their standard deviation of their monthly forecasting error is close to 40% for both markets in the mature and end-of-life stages according to Hooper. Although this figure is not directly related to a new product line such as Rainbow, one should seek out data regarding the accuracy of demand forecasting for new products.

Leo Linbeck, who is the head of product design, states that while H.P. has been requesting a U.P.S. and fuser for a long time from their partner, they are currently being rushed to make the decision to implement the U.P.S. because they only have two weeks to come to a consensus so that their Japanese partner may start producing the new product line. One should ask, why does H.P. have to implement the U.P.S. on this product line? Should they wait for a future product line to implement this innovative system until they have set up a framework of processes (i.e. DC distribution and cost recovery for the additional production cost per...