The Sport Obermeyer

Sport Obermeyer Case

Wally Obermeyer requested everyone in “Buying Committee” to give him an independent forecast report for its skiwear lines of 93-94. In the past, the incorrect forecast made by “Buying Committee” together cost Obermeyer many opportunities: popular styles were out-of-stock or items left after the selling season were sold at discount. The new forecasting procedure would rely more on committee member’s personal expertise and experience. Teamwork sometimes requires compromise. But individual opinions would encourage brainstorming from everyone. Because of each person’s distinct knowledge in different areas, as well as experience and intuition from past work, these personal opinions are of greater value and the result would be more accurate. For example, a production manager knows approximately how much a certain kind of parka was made and sold for last year. However, the sales manager would know more about the market interest trend in the future and would modify his numbers according to the information from his side. So the results could compensate each other for a better forecast.

In the initial order, Obermeyer would like to manufacture at least 10,000 parkas to meet the market demand. Because the company wouldn’t know how much is the accurate annual demand until after the Las Vegas fashion show, I think if possible, it is safe to produce 10 kinds of women’s parkas first instead of only producing a few of them in relatively big quantity compared to their forecast numbers. In this way, if a type of skiwear is popular, Obermeyer could make more afterwards and won’t be in hasty because they’ve already had some in stock. On the contrary, if a certain type proved to be unsuccessful, they would not lose much profit because they can choose not to produce in the second order. As Wally found that the actual standard deviation of a type is normally twice the standard deviation Buying Committee had forecasted, I’ll first divide the first order of...