In the Sport obermeyer case analysis essay, there are three elements that could decrease the minimum lot size at the Chinese factory: We solved this problem using simplifying assumptions and then relaxing some of those assumptions.
If he revises his forecast based on demand and decides he needs to order more units of Entice, he is now faced with a choice: The workers in Hong Kong are better trained than those in China, and in particular they are better cross-trained. In addition, two of the genders, Rex and Klausie, are heavily impacted in their buying decisions by status, and fewer designs would make those designs more recognizable, increasing the status associated with them.
We wanted to use a formula that took into account the average forecast as well as the standard deviation — in other words, we wanted to account for both the expected demand and the uncertainty. The second main issue to consider is whether to source in Hong Kong or China.
The appendix shows the resulting orders. The first part of our analysis involved deriving an order policy from the forecasts provided in the sample problem. Wally must decide where to source. Although we did not relax the assumption that all prices were the same, relaxing this assumption would have made this problem into a complex optimization problem and the optimal minimum order quantities would have been slightly different.
This suggests why the minimum lot size is greater in the mainland factory. The ability to order fewer units allows Wally to order units in a less risky manner.
All orders that are not constrained are now significantly closer than one standard deviation from the mean, increasing the chances that we will over order. Firstly, Obermeyer should be able to cut down on its product lead time, which gives it more time to analyze data and react, by stocking raw materials instead of ordering solely based on finished products.
In the short-term, Wally must consider this tradeoff between the lower labor cost of the mainland site and the lower minimum lot size of the Hong Kong factory and decide how to optimally source production to maximize profitability.
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For example, zippers, snaps, and insulation can be standardized across many designs, presumably without significant value lost to the customer, and stored for the second ordering cycle and then applied to whichever design ends up being successful.
Sourcing in China would cover losses by decreasing to amount lost per unit and sourcing to Hong Kong covers losses by decreasing the amount of units produced beyond demand in the primary markets. The forecast is now much more risky; for Entice, the order quantity is now greater than the minimum estimate, in addition to being very close to the average forecast.
Note that in Hong Kong, this risk is much less dire since he can order in unit blocks. If Wally under-orders on certain designs which he surely will because it is part of his ordering strategy he can only buy more units during the second cycle in groups of Sport Obermeyer Case Essay examples Words | 10 Pages.
Obermeyer Sport A Strategic Direction in Forecasting Introduction & Summary Klaus Obermeyer is an innovator in the high-end skiwear industry. Case: Sport Obermeyer Vijayakrishnan Krishnamurthy, Kara Maruszak, John Mulka University of Toledo BUAD July 4, Executive Summary Sport Obermeyer, Ltd.
was founded by Klaus Obermeyer to provide U.S. skiers with the same protective and stylish clothing and equipment available in Germany.
Sport Obermeyer Case Analysis Essay Sample. There were two main driving issues behind our analysis of this Sport Obermeyer case: the measurement and understanding of demand from uncertain and disparate forecasts, and the allocation of production between factories in Hong Kong and Mainland China (Lo Village, Guangdong).
The biggest challenge Sport Obermeyer is facing is uncertainty. The demand for each of the styles is completely un-deterministic and is very hard to predict. At the same time, Obermeyer production cycle is very long which is making it nearly impossible to adapt to the market.
We will write a custom essay sample on Sport Obermeyer Case Study. Sports Obermeyer Case Summary Sport Obermeyer was founded by Klaus Obermeyer as a ski wear manufacturer. Klaus was a teacher at aspen ski school and while teaching he realized that the ski wear available to his student were impractical, as they were less protective and less stylish.
Sport Obermeyer Case Analysis Words | 9 Pages. There were two main driving issues behind our analysis of this Sport Obermeyer case: the measurement and understanding of demand from uncertain and disparate forecasts, and the allocation of production between factories in Hong Kong and Mainland China (Lo Village, Guangdong).Download