Case Report for Sport Obermeyer, Ltd

Sport Obermeyer, Ltd

By: Jasvinder Singh, Anurag Sharma, Sean McLarney, Anne-Marie Davis, Lili Wang

1. Introduction

Sport Obermeyer, founded by Klaus Obermeyer is a fashion skiwear manufacturer headquartered in Aspen, Colorado. It offers a broad line of fashion ski apparel, including vests, ski suits, parkas, shells, ski pants, sweaters, turtlenecks, and accessories. Its products are offered in five different genders: men’s, women’s, boys’, girls’, and preschoolers’. Within each “gender”, numerous styles are offered, each in several colors and a range of sizes. With over $32 million sales in 1992, the company held an impressive 45% share of the children’s skiwear market and 11% share of the adult skiwear market.

Obermeyer also runs a joint venture called Obersport Ltd. which was started in 1985. The purpose of this joint venture is to manage production of Sport Obermeyer products in the Far East located in Hong Kong, Macau, and China. Raymond Tse is the managing director of Obersport Ltd which is responsible for fabric and component sourcing for Sport Obermeyer’s production.

Lately Klaus’s son Wally has been actively involved in managing the company’s internal operations. Working as Vice President, he relies heavily on formal data collection and analysis. He has to now make important ordering decisions to tackle the issues described below.

2. Issues

The major issues faced by Obermeyer can be divided into two broad categories via geographic challenges and demand forecasting.

2.1 Geographic Challenges

Wally has to decide which styles to make in Hong Kong and which would be better to produce in China. While China offers stable work force, versatility and lower costs, its labor force is not as skilled as Hong Kong which offers higher productivity, more complexity but higher costs. The Hong Kong facility is a reliable supplier in terms of quality and delivery timing.

2.1.1 Constraints

There are several constraints that make this decision...