Sport Obermeyer Case Study
Obermeyer Sports, Ltd.
Introduction
Sports Obermeyer, Ltd, a fashion skiwear manufacturing company, faces an array of issues before starting a new production cycle. The right timing for the production decision, prediction of production volume, associated risks, production process key steps that add value, and productivity issues are all concerns that must be addressed.
The first step of Obermeyer’s decision making is to decide sample production volumes. The sample production (10,000 units made in Hong Kong) will be used for the Las Vegas trade show that takes place 17 months prior to the actual retailing season. The decision for the season’s full production has to be made after some indication of demand that the show will determine. However, the sample production volume is determined primarily through the recommendations of the buying committee.
To be able to make an accurate forecast, past data and some level of actual orders should be available. The challenge of the first sample production order is, with a lack of historical data, the forecasts of six experts are the main source of decision making information. In this case, the data relied on is mostly qualitative; however, the decisions that are made are supported by quantitative results when possible. The amount of potential losses is determined in order to quantify the risk for each product.
Production Issues In March, the annual trade show in Las Vegas provides a good indication of yearly sales based off of retail orders. The production process takes seven months and the peak sales season for Obermeyer Sports, Ltd’s parkas falls in December and January. This forces a decision regarding production to take place immediately following the trade show in order to have finished products delivered and on display in retail stores for peak selling times.
Key Issues The decision of how many garments to produce in each style is made following the spring trade show in Las Vegas. Obermeyer can
Introduction
Sports Obermeyer, Ltd, a fashion skiwear manufacturing company, faces an array of issues before starting a new production cycle. The right timing for the production decision, prediction of production volume, associated risks, production process key steps that add value, and productivity issues are all concerns that must be addressed.
The first step of Obermeyer’s decision making is to decide sample production volumes. The sample production (10,000 units made in Hong Kong) will be used for the Las Vegas trade show that takes place 17 months prior to the actual retailing season. The decision for the season’s full production has to be made after some indication of demand that the show will determine. However, the sample production volume is determined primarily through the recommendations of the buying committee.
To be able to make an accurate forecast, past data and some level of actual orders should be available. The challenge of the first sample production order is, with a lack of historical data, the forecasts of six experts are the main source of decision making information. In this case, the data relied on is mostly qualitative; however, the decisions that are made are supported by quantitative results when possible. The amount of potential losses is determined in order to quantify the risk for each product.
Production Issues In March, the annual trade show in Las Vegas provides a good indication of yearly sales based off of retail orders. The production process takes seven months and the peak sales season for Obermeyer Sports, Ltd’s parkas falls in December and January. This forces a decision regarding production to take place immediately following the trade show in order to have finished products delivered and on display in retail stores for peak selling times.
Key Issues The decision of how many garments to produce in each style is made following the spring trade show in Las Vegas. Obermeyer can