Operation Management Sports Obermeyer, LTD
Operation Management Sports Obermeyer, LTD
Operation Management Sports Obermeyer, LTD
Question 1. Using the sample data given in Exhibit-10, assuming 2*sigma to be the standard deviation
of the demand, if the problem was reduced to a classic news vendor setting (where the entire
production quantity has to be committed upfront before the Las Vegas show), how much of each
product would you order, and what is the total production quantity you would block from the Honk
Kong facility?
Answer 1:
= $9
= $27
Z value = 0.6744
Averag
e Standard Order
Forecas Deviatio Quantit
Style t n 2*SD y
1278.66
Gail 1017 194 388 7
1477.66
Isis 1042 323 646 2
1692.50
Entice 1358 248 496 2
2983.59
Assault 2525 340 680 2
1613.89
Teri 1100 381 762 3
Electra 2150 404 808 2694.91
5
Stephan 1819.77
e 1113 524 1048 1
4766.93
Seduce 4017 556 1112 3
4708.19
Anita 3296 1047 2094 4
3323.11
Daphne 2383 697 1394 4
26359.2
Totals 20001 4
Question 2. If Honk Kong production facility offered only a capacity of 10,000 units, how much of each
product listed in Exhibit-10 would you order?
Answer 2:
Capacity = 10000
Question 3. What are some of the operational changes that you can suggest to Sport Obermeyer to
reduce the expected costs of stock outs and markdowns?
Answer 3:
To improve forecasting, the consumer behavior and latest trends need to be analysed. Focus
group discussions, posting products on social networking sites, analyzing customer reviews on
online platforms can be done.
Since designs are finalized in September , therefore customers should be given the option to
pre-order products. This will help in analyzing customer demands in a more realistic way.
Develop a skilled workforce labour and quality managers in the Lo village plant.
Common fabrics can be used for multiple items to save on cost.
Alpine can think of opening new plants in China
Shipping directly from China to retailers without the Denver warehouse
Sports obermeyer should think of expanding to new locations by selling excess inventory at new
locations
Real-time data from retailers can be collected for estimating demand
Fabric can be ordered in bulk and stored to cut down losses