Sport Obermeyer

Executive summary

My decision is to find a methodology of calculating more accurate demand and supply figures to address the unpredictable world of short life cycle fashion. The Fashion Industry is extremely competitive, as well as trendy. Last year Columbia Sportswear, a competitor of Sport Obermeyer, managed to capture 23% of the Adult Ski-Jacket market. This, along with the ever increasing varieties of products, as well as, no clear indication of what the end consumers’ reaction to the line will be, makes this a very careful blending of analysis, experience, intuition and sheer speculation when making this decision. I will identify how many units of each style I should make during the initial phase, the outcome of producing the same articles in China as opposed to Hong Kong and the operational improvements that will assist Sport Obermeyer to improve performance.

Key assumptions

It is anticipated that a two years lead time of planning and production activity must take place prior to the actual sale of products to consumers.

Workers in Hong Kong work about 50% faster than their Chinese counterparts. They are more highly skilled and typically trained in a broader range of tasks.

In China, lead times are longer and more labour is required per unit, however, the cost of production is much lower due to lower wages and proximity to raw materials. Hong Kong is more expensive relative to both of these concerns, but can produce much quicker and with fewer workers.

Statement of Issue(s)

Ski wear product is a short-life cycle over a single selling season encompassing high demand uncertainty, limited to non-existent background data for forecasting, poor lead times with both companies imposing minimum production quantities. Before I joined the company, the management style was a more intuitive one that was heavily informed by extensive industry experience rather than formal data-gathering and analytical techniques. But now, with the competition sales increasing...