OPERATIONAL MANAGEMENT/LOGISTICS SPORT OBERMEYER ‚ LTD. A) What Operational changes would you recommend to Wally to improve performance? B) How should Obermeyer management think (both short and long-term) about sourcing in Hong Kong vs. China? C) Based on Exhibit 10 in the case‚ how should Wally plan production in November? Think about the question qualitatively – identify factors that would affect the timing and quantity of product decisions. To understand what operational
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Sport Obermeyer Sport Obermeyer‚ Ltd was created around 1947 by Klaus Obermeyer. While teaching at an Aspen Ski School‚ Klaus noticed a difference between the clothing that his students wore and the clothing skiers wore in his native Germany. Although Klaus started out by traveling to Germany to find high-performance skiwear that was suitable for his students‚ he designed his own line of skiwear and ski equipment products and that was how Sport Obermeyer‚ Ltd was introduced. Sport Obermeyer
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3. How should Obermeyer management think (both short-term and long-term) about sourcing in Hong Kong versus China? Long Term From a quality standpoint‚ production in Hong Kong would be ideal considering the repair rate in China is five to ten times greater than it is in Hong Kong. Although the costs of repair are relatively low‚ Obermeyer is a high quality apparel company‚ and its customers in all likelihood want durable products. Not only would this keep customers happy in the short term‚ but
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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
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Obermeyer Sport A Strategic Direction in Forecasting Introduction & Summary Klaus Obermeyer is an innovator in the high-end skiwear industry. The company began with down filled jackets and slowly began to diversify its product line with high-altitude suntan lotion‚ turtlenecks‚ nylon wind-shirts‚ mirrored sunglasses and more. In 1961‚ the first Sport Obermeyer factory warehouse opened in Aspen‚ and the innovations continued with “soft-shell” jackets‚ double lens goggles‚ and the first
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Sport Obermeyer 1 Sport Obermeyer’s Time Line and “Speculative” versus “Reactive” Production "NOW" Initial Forecast 9 months Feb … Oct 1992 … 1992 Design of 1993-94 Line. Las Vegas Revised Forecast 5 months Nov … Mar 1992 … 1993 5 months April … Aug 1993 … 1993 "Speculative" Production "Reactive" Production of 1993-94 Line of 1993-94 Line In Feb 1993‚ start design of 1994-95 line. “Speculative” Production 27 Months Sept 1993 Oct 1993 Nov 1993 8 months Dec Jan 1993 1994 Selling of
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demand requires a heavy reliance on accurate forecasting. Sport Obermeyer‚ Ltd is in the business of manufacturing skiwear which includes short life cycle items due to their short selling season and dependence on trends in fashion. Each year Sport Obermeyer is challenged with matching supply to demand because production must be forecasted more than one year ahead of the expected selling season. These forecasts determine how much Sport Obermeyer should produce‚ but still entail an element of risk. Labor
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The Sample Problem Objective: To prepare a production schedule according to demand forecasts made by the design committee. Constraints: 1. Minimum order quantity at: Hong Kong – 600 China -1200 2. Total order quantity (1st schedule): 10000 3. Almost Half of production to be done each in China and Hong Kong Expected Safe Margin of Production: Average Forecast – 2* standard Deviation |Style |Price |Average |Std Dev |2 * Std Dev |Safe
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Wally Obermeyer is facing a challenge in accurately forecasting the market response and demand for the upcoming season. Historically‚ the company founder‚ Klaus Obermeyer‚ relied minimally on forecast data‚ and more on intuition and artistic tastes. In comparison‚ his son Wally prefers to make decisions based on analytical techniques and information gathering. If Wally’s approach proves successful‚ it can change how Sport Obermeyer approaches its manufacturing processes‚ secure its position long-term
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Case: Sport Obermeyer Using the sample data given in Table2-20‚ make a recommendation for how many units of each style Wally should male during the initial phase of production. Assume that all of the 10 styles in the sample problem are made in Hong Kong and that Wally’s initial production commitment must be at least 10‚000 units. Ignore price differences among styles in your initial analysis. Style Mean Std Dev produce (avg-2SD) Hong Kong Gail 1017 388 639 629
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