Friday, May 17, 2019

Sport Obermeyer Minimum

Wally Obermeyer is facing a challenge in accurately forecasting the market response and inquire for the upcoming normalize. Historically, the community founder, Klaus Obermeyer, relied minimally on forecast info, and more on intuition and artistic tastes. In comparison, his son Wally prefers to make decisions base on analytical techniques and information gathering.If Wallys approach proves successful, it jakes change how gambling Obermeyer approaches its manufacturing processes, secure its spotlight long-term as the middle- to high-end producer of skiwear, improver profits, and meliorate meet the companys objective of delivering duplicate collections to retailers at the same time and earlier in the season. Sport Obermeyer has many challenges to oercome. prognosticate is problematic since mathematical product commitments argon required in November, besides the bulk of the hunting lodges ar not placed by retailers until the Las Vegas business deal show in the underment ioned March.Also, the market trends are seasonal, changing frequently, and adding to the difficulty in forecasting. The company cannot get across mathematical product completion dates due to the quota typeset on importation of goods from China, where a bulk of its production occurs. Adding yet complications to the manufacturing decisions, the company has a new manufacturing rapidness coming online in Hong Kong, and must determine what products, and how untold of those products should be manufactured in each of the facilities. Issues with vendors of raw materials must be addressed.There are long lead clock for some vendors, and beca custom of that, excess inventory is maintained in the manufacturing facilities. The company must also maintain a competitive edge with the growing bosom from competitors, specifically Columbia. Sport Obermeyer has relied on a buying perpetration comprised of key manager to forecast production demands, and make decisions regarding production com mitments. Historically, this mission has done fairly puff up in predicting which styles will be popular, and forecasting has been best for the styles on which agreement was greatest between the military commission members.In order to take the greatest advantage of this committal, Wally Obermeyer is utilizing the Delphi method. This method will give Wally the opportunity to determine which members of the committee have the greatest accuracy. While it may not pay make in the immediate decisions, over several years, he will be adapted to determine which members opinions should receive the greatest weight when devising production decisions. In the meantime, a decision must be made regarding the upcoming season.Wally should proceed with the negligible order necessary, one-half of the total expected demand for the season (10,000 units), to keep up with production demands. Since the stripped production quantity for a style is 600 units from the Hong Kong rapidity, Wally should i nitially only fancy production of styles predicted to exceed this limit until the bulk of the order come in following the Las Vegas show. In doing so, the risk of overproducing a style, and being oblige to sell it at a deficit will be mitigated. Past data indicates the buying committees forecast is accurate within two standard deviations.Using these forecasts, Sport Obermeyer should delay production of the Isis, Teri, and Stephanie styles since they demand is forecasted to be low for them, and proceed with the remainder of the items in consideration (See Table 1 for quantities relating to each style). Forecasting also has difficulties due to the delay in information from retailers regarding which products are most popular. Long-term, and if financially feasible, Sport Obermeyer should consider providing retailers liable for the majority of purchases of their good with software that will provide Sport Obermeyer with real-time data on gross sales of its product.By doing so, the co mpany will better be able to predict what items are desired for successor orders, and greatly geld goods sold to South America at prices below manufacturing costs. Furthermore, Sports Obermeyer can approach retailers kinda regarding replenishment orders based upon the data it has collected. If replenishment orders are received sooner, then the cost of shipment is greatly decreased since fewer will require air shipment. Lastly, the company should take an active role in influencing the demand of products it forecasts as being most popular to ensure these items are in high demand.Sport Obermeyer should pressure its sales force to promote these items by providing incentives, such as bonuses, to its personnel. If need be, the company can also provide discounts for large bulk orders to retailers. Lastly, the company should heavily promote these items via advertisements campaigns. Sport Obermeyer needs to be able to keep up with production demand, and in the case the company is overly successful in thrust the styles it predicts to be in highest demand, resulting in Sport Obermeyer needs to be able to meet the production demands generated.The manufacturing facility in China can produce goods much more cheaply than the facility in Hong Kong, but the quality and startup time are inferior to the Hong Kong facility. Obersport, a joint venture of Sport Obermeyer, is responsible for monitoring quality of the raw materials, and coordinating production Sport Obermeyer products in the Far East. Obersport should implement and fly high upon its genuine quality control and quality assurance practices.Sport Obermeyer should pare down the variation in its products to reduce the frequency in changing manufacturing lines resulting in the facility in China being able to do orders faster. Sport Obermeyer needs to reduce the planning time required for each season. Currently, planning for a season must start two years in advance. This is a hindrance to the company since forecasti ng data improves as the start of the season being planned for becomes closer. Reducing the number of vendors for raw materials, as well as the variety of styles available will shorten the time for planning.Furthermore, Sport Obermeyer will be parliamentary law more from a few vendors, giving them greater buyer power to negotiate discounts, resulting in increase profits. Reducing the variety in the raw materials used should increase quality in addition to step on it up production. Long-term, after lead time and vendor issues are resolved, Sport Obermeyer should consider spinning off another brand within the company to be marketed separately from its current line. As costs for manufacturing are reduced due to a more streamlined production process, Sport Obermeyer will be better able to compete at the same price point as Columbia.By creating a new brand, the company will not risk reducing the reputation for quality associated with Sport Obermeyer, but will be able to compete directly with Columbia and take part of its market share. This move will increase sales for Sport Obermeyer, as well as limit the growth of Columbia. Furthermore, Sport Obermeyer should consider producing passage wear for both the current high-end brand and the lower-end brand that will compete with Columbia. This will expand the markets to which Sport Obermeyer is competing in, and increase visibility of the brands since the clothing will be worn year round.Sport Obermeyer places production orders three times each season. The first order is placed prior to the Las Vegas trade show, the second is placed the week following the trade show, and the third comes at the end of the season when replenishment orders are made. Short-term, until quality and vendor issues are resolved, Sport Obermeyer should place the first order with the Hong Kong manufacturing facility. The stab in the Hong Kong facility is significantly higher than the facility in China, but the quality is better in Hong Kong.Also , the Hong Kong facility is able to produce goods faster. The second order should be placed with the facility in China to take advantage of the markedly reduced labor costs. The third order should be placed in Hong Kong since these orders need to be produced quickly to reduce the use of expensive air shipment in lieu of using an ocean carrier. Long-term, if Sport Obermeyer elects to pursue a spinoff brand, the lower quality product should be manufactured in China to take advantage of the reduced cost of production.The Hong Kong labor force should have increased labor skills by this point, and production output should be optimized. The Hong Kong facility should continue to produce the high-end Sport Obermeyer lines. Even though the cost of production will be greater in the Hong Kong facility, the revenues generated by this facility should be greater since the high-end clothing can be offered at a higher price point. Sport Obermeyer has many problems to address, but with just a few ad justments, they can be rectified. By paring down the variety of options in the lines, quality will be increased.Forecasting is modify by implementing the Delphi method in the Buying Committee, and adding a weighted accuracy measurement to the Committee members in future seasons. Reducing the number of vendors remedies the excessively long lead times, and provides Obersport with buyer power to negotiate discounts. Providing the primary quill purchasers of Sport Obermeyer products with free software for tracking sales allows Sport Obermeyer to better predict replenishment orders, and eliminates much of the use of air carriers, as well as eliminates overproduction of goods that are sold below manufacturing cost.By creating a second brand, Sport Obermeyer can compete directly with Columbia, and not tarnish the image of quality associated with its current lines. Lastly, Sport Obermeyer can drive sales toward the items it predicts will be popular by offering incentives to sales personne l, large customers, and launching advertisement campaigns to also eliminate overproduction and lost revenues. Table 1 good word of order quantity for each style of Parka considered by the Buying Committee.Since orders had to be placed in Hong Kong where a 600 unit amount is needed, the styles of Isis, Teri, and Stephanie were ignored in the order placement for the first phase of production due to uncertainty of need. Style Average Forecast 2SD k=1 k=0. 9675 Gail 1017 388 629 642 Isis 1042 646 396* Entice 1358 496 862 878 polish 2525 680 1845 1867 Teri 1100 762 338* Electra 2150 807 1343 1369 Stephanie 1113 1048 65* Seduced 4017 1113 2904 2940 Anita 3296 2094 1202 1270 Daphne 2383 1394 989 1034 Total 9774* 10001 I

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.