Draft a response to another students original discussion board post. This students post is answering questions related to a case study. This response must include 3 research refrences. I have attached the case study that this post is in reference to for your refrence material in responding to this students post. .Here is what the students original post was:

Sarah Donohoe, along with her colleagues, face a unique decision to implement a universal power supply to the new HP printer, “Rainbow.” At first look, the deciding factor seems to be solely the increased price of manufacturing, but on a further, detailed analysis many more factors arise.

Postponement Strategy
Currently, HP must provide forecasting for different geographical locations 14 weeks before production is needed. If HP decides to use a universal power supply, they eliminate the requirement to forecast separate markets. The move to a universal power supply would also reduce lead times by two weeks since HP’s Japanese partners would no longer need those two weeks to make different components. This postponement strategy would align with that of Luo and Zhang’s research showing “many advantages in implementing postponement strategy for manufactures” (Luo & Zhang, 2018).

Costs and Benefits
The deciding factors for the decision to move to a universal power supply begins with the cost. The make this change, HP will be required to pay $30 more per “Rainbow” printer. This cost will need to be passed on to the consumer (of which price sensitivity present concerns), or HP must take the $13.5 million reduction to their bottom line. (Simchi-Levi, Kaminsky, & Simchi-Levi, 2008, p. 361) However, the deciding factor goes well beyond cost. HP must take into consideration an increase in inventory carrying and holding cost. There could also be an increased risk of stock out cost and transhipping costs. On the contrary, however, HP could realize substantial benefits from an operational standpoint as the additional two weeks provided to them would provide a better chance at forecasting which could significantly reduce all costs associated with the change to a universal power supply.

Effect on Product Life Cycle
The typical product life cycle for an HP product, specifically printers, is about 18 months (Simchi-Levi et al., 2008). As mentioned in the case study, a 14 week lead time for a product with an 18 life cycle is “ridiculous!” (Simchi-Levi et al., 2008, p. 360). Never-the-less, HP is positioned to make such operational mountains move. The universal power supply decision can significantly help in the ramp-up time, which is the most crucial to establishing a market position before other entries in the maturity cycle. (Simchi-Levi et al., 2008) This skill will also reap benefits at the end of life by HP reducing the amount of stale inventory due to better forecasting.

HP Boise Improvements
The operations at the HP Boise factory integrate the power supply and fuser unit with the printed circuit board. To minimize operational delays, HP should leverage air shipment when a pending stock-out is expected. Where forecasting provides time, and it should increasingly, HP should use the more cost-effective sea freight option.

Universal Power Supply Recommendation
HP should move to a universal power supply for the “Rainbow” printer as the benefits outweigh the associated costs. Apart from the pros/cons analysis on this printer, this decision will positively shift all future productions to a universal power supply having an exponential return on the perceived “Rainbow” specific costs. HP could look at this move as a longterm sunk cost. Santos concluded in his research that “even moderately sized sunk costs of R&D can boost the gains” (Santos, 2017). This move will change consumers expectations about the convenience HP provides as better forecasting and inventory should allow HP to internally consume the increased cost and not pass it on to consumers.

References

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and managing the supply chain: Concepts, strategies and case studies (3rd ed.). New York, NY: McGraw-Hill Irwin.

Luo, J., & Zhang, Q. (2018). Operations mechanism of postponement strategy for service-oriented manufacturing. The International Journal of Advanced Manufacturing Technology, doi:10.1007/s00170-018-3092-5

Santos, C. D. (2017), Sunk Costs of R&D, Trade and Productivity: The Moulds Industry Case. Econ J, 127: 1626-1664. doi:10.1111/ecoj.12343

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