Sport Obermyer

Executive Summary The solution to Wally’s “Fashion Gamble” comes from accurate forecasting of the demand making his production orders less of a guess. This can be achieved by delaying the initial order until after the Las Vegas show, allowing for feedback on the designs and the receipt of 80% of the orders for the upcoming year. The realities of poor forecasting can be felt every year when a specific style of colour exceeds demand, and must be sold at a discount. The opposite is also valid where a style sells out and revenue is lost due to missing product. This delay in ordering would require changes to the way Obersport operates with regards to manufacturing and logistics. Air freight and drop shipping of the initial orders, for example, would shave up to four months off the cycle time. This would move the initial order date from November to March (after the Las Vegas show), and still allow August delivery to the retail stores. Key Assumptions 1. For the purpose of this paper assume that the lead times for the components and fabrics used in the manufacturing of the garments remain constant year to year. 2. There is also the assumption that market conditions are stable enough to support similar sales volume as previous years. Statement of Issues The main issue that faces Sport Obermeyer is inaccurate and inconsistent forecasting due to the extended cycle times needed to bring their products to market. In the current supply chain, the supply orders need to be placed before

the demand is known which can result in shortages of popular styles, and excess inventory of the less popular styles. Both of these outcomes cost the company money. Another issue facing Sport Obermeyer and Obersport is where to manufacture, Hong Kong or China. Hong Kong offers faster higher quality goods with no restrictions by the United States Government, while China offers much lower costs. Criteria The ideal outcome in this case would be more accurate forecasting for their production...