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Just-in-Time Production at Hewlett-Packard, Personal Office Computer Division

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Case: Just-in-Time Production at Hewlett-Packard, Personal Office Computer Division
Question 1: Should it be easier to run JIT effectively on the 150 than on the 120? Explain.
Considering information given in the beginning of the case, it should be easier to run JIT effectively on HP-150. 1) HP-150 requires less number of parts, which leads to less inventory needed (20,000 active part numbers for HP-120 and its options vs 450 part numbers for HP-150); 2) Less suppliers are needed for HP-150 (200 suppliers), comparing to HP-120 (2,000 for HP-120 and its options). It will be easier to establish and maintain efficiently a long-term trustworthy relationship. 3) HP-150 has less variety (17 types of keyboards due (languages) while CPU is the same), but for HP 120 there were an average of 6 options per product. Less variety, again, provides fewer inventories and more flexibility to the process.
To reduce complexity
Question 2: How serious is the forecasting problem? In other words, does success with JIT depend on good forecast? Forecasting problem seems to be severe at the plant. Case says that “…manufacturing does a lot of “second guessing” because the forecasts are terrible”. However, good forecast for JIT systems is crucial. As JIT significantly reduces the amount of raw materials, WIP inventories and finished goods on hand, it greatly relies on accurate information, i.e. on the timely delivery of exactly the right raw materials in the right place in the right amount. This leaves little room for forecast errors.
In case of JIT forecast is easier (less time between orders). On the beginning of JIT implementation accurate forecast is more crucial. Once relationship with suppliers gets closer, it may create more flexibility and responsiveness even hedging the forecast error.
Question 3: What is the

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