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SPORT OBERMEYER CASE
Transcript of SPORT OBERMEYER CASE
From our analysis, what Obermeyer need to do for the issues is:
1. About initial phase production:
The effective forecast using the trend reference
Push and pull strategy
2. Where to do the production:
China factory has minimum order quantity about 1,200 units in same style, while Hongkong Factory has minimum order about 600 units in same style. Based on the calculation, there are 4 styles which is going to be produced in China factory, such as Assalut (1845 units), Electra (1343 units), Seduced (2904 units), and Anita (1202 units). The rest style will be produced in Hongkong.
Founded in 1947 by Klaus Obermeyer
Klaus found that many of his student cold and miserable because of the impractical skiing clothes
In 1961, the first Sport Obermeyer factory warehouse opened in Aspen
Over the years, Sport Obermeyer developed into preeminent competitor in skiwear market. competing with the likes of Jacobs coporation, North face, etc.
Obermeyer offered a broad line of fashion ski apparel, including parkas, vests, ski suits, shells, ski pants, sweaters, turtlenecks, and accessories.
Obermeyer competed by offering an excellent price/value relationship, where value was defined as both functionally and style, and targeted the middle-to high-end of the skiwear market
Unlike some of its competitors who made outwear for both skiing and for casual “street wear”, obermeyer sold the vast majority (over 85%) of its products to customers for use while skiing.
Ayu Pratiwi Lubis / 29114532
Frans Risky Juliver Purba / 29114590
Grace Aloina Sitepu / 29114403
Reinaldy Agung P. / 29114351
Talkah Putra / 29114410
Committing to specific production quantities for each skiwear item the company would offer in the coming years
how to allocate production between factories in Hong Kong and China
THE ORDER CYCLE
THE SUPPLY CHAIN
Using the sample data given in Table 2-20, to determine how many units of each style Wally should make during the initial phase, determine the speculative production quantities using this formula:Max(0,μ-kσ)
Then, make individual forecasts for the production with each style
After some consideration in production, then we classified the product into 3 different type of products according to the risk that the product bear to:
Low risk: risk % between 0 and 40
- Medium risk: risk % between 41 and 59
- High risk: risk % above 60
Because we want to minimize the risk so we decided to order more product in low risk types
Calculate the risk using this formula : (2×Stdev)/Average
To minimize the risk, we decided to order the following quantity, based on the risk classification.
- Low risk items:
of the average forecast
- Medium risk items:
of the average forecast
- High risk items:
of the average forecast
CASE QUESTION #1
CASE QUESTION #2
Same process with question #1
CASE QUESTION #3
• Improve the production quality of China factory to be closed to Hongkong
• Reduce Lead Time in Production
• Reduce lead time in distribution
• Selective for the best supplier which on time and properly price.
• Build a dedicated R&D team to develop product and make a better forecasting
• Improving the service level agreements in order to widen and accelerate the distribution channel, both for domestic and overseas.
• Make a creative strategy which will boost up the sales
Information sytem improvement
• Collect the data backward and analyze the demand of the show in Vegas and compare with actual purchase.
• Speedup data/information analysis and utilize historical data / Committee forecasting / Research and Trend & Market Movement.
CASE QUESTION #5
THE PRODUCTS SEGMENTATION
CASE QUESTION #4
By the data given the optimal strategy is to make an alliance strategy, joint operation between China and Hong Kong would be an ultimate solution for the production.
For the short run strategy:
Because, Hong Kong has higher quality and most of the Obemeyer’s parka component was from Hong Kong so they do not need to ship to China.
With volatile demand, we prefer for this low MOQ, and for the brand we need to carefully choose the factory which produce better quality for the product to boost the brand equity.
For the long term strategy:
The production is better located in China considering to a lower production cost with a condition that the chinese labors are trained as good as in Hongkong.
Related to minimum order the company can negotiate the factory to lower the quantity minimum order to be below 1200.