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OM - Reebok Case
Transcript of OM - Reebok Case
playoffs Fluctuates depending on
performance - Off season demand due to player trades and signings
- Sales cycle Jan - Feb Mar - Apr May - Aug Sep - Jan - Discounts for early
- 20% of annual orders - Limited ordering
- Order adjustments
ex: Player movements - Position inventory in DC
- To meet in-season replenishment
requirements - "The Chase"
- Adjust inventories to meet "Hot Market" demand "Hot Market" Item Unsold Inventory 1 - 2 Week lead time ? Scores 3
touch downs Mediocre performance Mikel Leshoure Fabric
Inventory Cut, Sew &
Printing Blank Goods
Weeks Shipping Blank Inventory
@ Supplier FG
Printing 2 - 16
Week Contract Manufactures Reebok - Purchase Cycle starts 14 months before target season
- Jan - Feb : Orders placed against known demand
- Mar - Apr : Combination of known demand and forecasts
- May - Jun : Against forecasts - Dressed and Blanks
- Unsold Jerseys : sold to discounters or kept for next season
- Keeping for next season : Carrying costs, Risk of change in uniform / player movement
- Dressed sold to discounters; Blanks kept for next season - 10yr exclusive rights to manufacture, market and sell NFL merchandise
- Licensed Apparel : High margin business
- Sole supplier : Retailers had only one source
- Reebok purchased LogoAthelitic : to develop expertise in licensed apparel business The right Strategy Social Forecasting Nike NFL Uniform "FAT" Issue - Nike currently the official NFL merchandise partner
- The new "improved" uniforms
- Trends on social media Elite Range Game Range - Hits the elite range of Jerseys - Assess demand based on Social activity
- Mostly used to measure extreme deviation
- Indicator of “happenings”
- In many Fad / Niche products - Social media influences demand - example: Nike "FAT" issue
- Uncertain demand items - shifting to distribution on Internet; In such cases “social” influence is even higher
- Web 3.0 Thank you Responsive Chain Strategies Payoffs - Optimistic Scenario Payoffs - Pessimistic Scenario Team - New England Patriots
Demand forecast is available Planning Problem Key values Inventory Levels - Printed Inventory Level – Blank Jerseys - Team had recently changed jersey and there is little chance for it to change again in the near future.
- For 6 key players printed jerseys while for others blank jerseys are ordered
- Supplier constraint of 1728
- To find out the level of Safety Stock, when to order and how much to order. Planning Problem Workings Hot Market Prices and Costs Cost of Underage:
Inventory less than demand
Loss of opportunity to make profit.
Cost of Overage
Inventory stocked more than demand
Ends up in excess stock which can be salvaged to a lesser value. Hence there is a loss. Cu & Co Cu & Co