Hewlett-Packard uses FedEx to handle all of its fulfillment orders from its retail web site. Once an order is placed at the HP web site, it is automatically transmitted to FedEx's Memphis headquarters. Orders are packaged at FedEx's warehouse and shipped by FedEx to the HP customer. This arrangement was set up as a long-term solution to problems with distribution capacity that HP experienced prior to the implementation of this arrangement. Which strategy is HP using to flex demand to meet capacity?
A) Aligning its capacity with demand fluctuations
B) Stretching its existing capacity
C) Shifting demand to match its capacity
D) Smoothing peaks and valleys of demand
E) Outsourcing

Question

Quizplus · Accepted Answer

HP is using outsourcing by having FedEx handle its fulfillment orders, which allows HP to manage its distribution capacity issues by relying on FedEx's resources and expertise.

Hewlett-Packard Uses FedEx to Handle All of Its Fulfillment Orders