Professional skills: Consulting

Question asked

During this project students took on the role of consultants at Golden Solutions, which is a fictional consultancy firm working in the field of logistics. This company was asked by HP to come with a recommendation regarding their stock levels, because of the trouble the company momentarily is having containing the stock - and its related annual costs on inventory and ordering.

Approach

The approach of the consultancy team consisted of four steps, namely: 1. Map the current situation at HP 2. Work out an inventory model for HP 3. Work out the postponement method for HP 4. Write an actual recommendation for HP, which is based on the two mentioned methods above

Result

Golden Solutions calculated that HP momentarily spends $ 8,679,900 annually on inventory and ordering. Also it was calculated that HP can drastically decrease these costs by implementing one of the methods worked out by Golden Solutions. The developed inventory model can result in annual savings of $ 1,132,300, while the postponement method can result in a staggering amount of $ 3,330,050 on savings per year. The final recommendation of Golden Solutions is to implement the postponement method - even though its quite far-reaching character, because it results in gigantic annual savings for HP.