Sport Obermeyer, Ltd
Sport Obermeyer, Ltd
Wally Obermeyer, the internal operations manager of Sport Obermeyer, a mid-to-high fashion ski apparel company with headquarters out of Aspen, Colorado, and son of company founder Klaus Obermeyer, has two dilemmas at hand.
1) How to forecast demand for specific skiwear items for the 1993-1994 fashion line? 2) Once quantity per item is determined, how should production be allocated between factories in Hong Kong and China?
Although the case mentions the company has a two year period for planning and production before reaching consumers, Sport Obermeyer really has only one year to plan and design before production begins right before the Las Vegas Show, where 80% of the company’s annual volume for the line are received shortly after.
As the case states, “… the ultimate success of the line was highly dependent on how well the company was able to predict market response to different styles and colors.” This meant that predicting the future was the key to a successful year. Wally is already heading in the right direction by having his Buying Committee, comprised of six Obermeyer managers, independently forecast demand for each product. This allowed the forecasts to be free of any bias or pressure between the managers. Wally could also calculate the mean production forecast for each product and compare it to his own mean. This mean he calculates would also be an average of the product forecasts, but have him throw out the high and low forecasts in it. The closer his mean is to the Buying Committee would indicate an accurate forecast for the upcoming line as it has shown in the past. For conservatism’s sake, production for the most correlated, large forecasted product (assuming popularity is directly correlated with forecasted production) should add the standard deviation amount Wally calculates for the products. For the less popular styles, production forecasts should be whichever of the two averages is lower. This
Wally Obermeyer, the internal operations manager of Sport Obermeyer, a mid-to-high fashion ski apparel company with headquarters out of Aspen, Colorado, and son of company founder Klaus Obermeyer, has two dilemmas at hand.
1) How to forecast demand for specific skiwear items for the 1993-1994 fashion line? 2) Once quantity per item is determined, how should production be allocated between factories in Hong Kong and China?
Although the case mentions the company has a two year period for planning and production before reaching consumers, Sport Obermeyer really has only one year to plan and design before production begins right before the Las Vegas Show, where 80% of the company’s annual volume for the line are received shortly after.
As the case states, “… the ultimate success of the line was highly dependent on how well the company was able to predict market response to different styles and colors.” This meant that predicting the future was the key to a successful year. Wally is already heading in the right direction by having his Buying Committee, comprised of six Obermeyer managers, independently forecast demand for each product. This allowed the forecasts to be free of any bias or pressure between the managers. Wally could also calculate the mean production forecast for each product and compare it to his own mean. This mean he calculates would also be an average of the product forecasts, but have him throw out the high and low forecasts in it. The closer his mean is to the Buying Committee would indicate an accurate forecast for the upcoming line as it has shown in the past. For conservatism’s sake, production for the most correlated, large forecasted product (assuming popularity is directly correlated with forecasted production) should add the standard deviation amount Wally calculates for the products. For the less popular styles, production forecasts should be whichever of the two averages is lower. This