Syndicate 2:

Marnala Joshua 29114880

Nabillah 29114786
Okki Hamdani 29114745
Ramilijaona Miora 29114723
Vynica Septariani 29114772

 Founded in 1947 in Aspen, Colorado

Sport Obermeyer was born of necessity by Klaus
Obermeyer
Obermeyer offered a broad line of fashion ski apparel,
including parkas, vests, ski suits, shells, ski pants,
sweaters, turtlenecks, and accesories
Obermeyer products were offered in five different
genders: mens, womens, boys, girls, and
preschoolers
Obermeyer competed by offering
an excellent price/value
relationship; targeted the middle
to high end of the skiwear market

OBERMEYERS SUPPLY
CHAIN
PROCESS
Textile and
Produce, dye and print shell and lining fabrics,
Accessories
Suppliers
Apparel
Manufacturers

Obersport

Sport
Obermeyer
Retailers

supply insulation, zippers, thread, logo patches

and snaps.
Subcontractors, receive production orders and
materials from Obersport. Cut, sew and final
assembly.
Responsible for material and production sourcing
in the Far East. It also acts as a distribution
centre for materials and finished goods.
Product design, production planning and sales.

Purchase from Sport Obermeyer and sell products

to consumers.

ISSUES
How to predict market response to
different styles and colors
Excess merchandise; worst selling records were
sold at deep discounts
Frequently ran out the most popular items

How to allocate production between the

factories in Hong Kong and China
How should he incorporate all of these
differences into a well-founded decision about
where to source each product?

The Differences Between Production in HK

and CHINA
Individual Forecasts
Style

Price
Laura Carolyn

Gail

$110900

Greg

Wendy

Tom

Wally

Standa 2 x
Averag
rd
Standa
e
Deviati
r
Foreca
on
Deviati
sts
(SD)
on

1.000

900

1.300

800

1.200

1.017

194

388

Isis

$99800

700

1.000

1.600

950

1.200

1.042

323

646

Entice

$801.200

1.600

1.500

1.550

950

1.350

1.358

248

496

Assault

$902.500

1.900

2.700

2.450

2.800

2.800

2.525

340

680

900

1.000

1.100

950

1.850

1.100

381

762

Electra $1732.500
Stephan
ie
$133600

1.900

1.900

2.800

1.800

2.000

2.150

404

807

900

1.000

1.100

950

2.125

1.113

524

1.048

Seduced

4.300

3.900

4.000

4.300

3.000

4.017

556

1.113

3.296

1.047

2.094

2.383

697

1.394

Teri

$123800

$734.600

Standard Deviation of demand 2x Standard Deviation Forecast

Cut and Sew Capacity 3.000 units/month (7 month period)
Anita
$934.400 3.300 3.500 1.500 4.200 2.875
First phase of production 10.000 units
Second phase of production 10.000 units

Daphne $1481.700

3.500

2.600

2.600

2.300

1.600

1# UNITS PRODUCTION?
Initial production commitment must be at
least 10.000 units
Production quantity = average k * stdev

If....
10.000 =20.000-k*9.428
9.428k =20.000-10.000
k = 10.000/9.428
k = 1,06067

Style

Average Forecast
()

Standard
Deviation
()
388
646
496
680
762
807

Production
Quantity
(-k)
605
356
833
1,803
292
1,294

Gail
1,017
Isis
1,042
Entice
1,358
Assault
2,525
Teri
1,100
Electra
2,150
Stephani
1,113
1,048
e
1
Seduced
4,017
1,113
2,836
Anita
3,296
2,094
1,075
Daphne
2,383
1,349
905
Totals
20,000

10,000
Since using K= 1.06067 gives an estimation of final quantity
of 10,000 which is appropriate to our requirements of at least
10,000 we will use this data for placing the production
orders.

2# RISK MEASUREMENT?
Risk is something that happens because there is
uncertainty
Forecasts are always uncertain

2# RISK MEASUREMENT?

2# RISK MEASUREMENT?
Forecasts uncertainty have to be assessed for more
certain result

How can we assessing forecast

certainty?
Based on historical data

2# RISK MEASUREMENT?
Individual Forecasts
Style

Price
Laura Carolyn

Gail

$110 900

Greg

Wendy

Tom

Wally

Standar
Coefficie
Average
d
nt
Forecas
2x SD
deviatio
of
ts
n (SD)
variation

1.000

900

1.300

800

1.200

1.017

194

388 0,191

Isis

$99 800

700

1.000

1.600

950

1.200

1.042

323

646 0,310

Entice

$80 1.200

1.600

1.500

1.550

950

1.350

1.358

248

496 0,182

Assault

$90 2.500

1.900

2.700

2.450

2.800

2.800

2.525

340

680 0,135

900

1.000

1.100

950

1.850

1.100

381

762 0,346

Teri

$123 800

ElectraUsing
$173
2.500
1.900 1.900
2.800(speculative
1.800 2.000
2.150
0,188
early
production
capacity
capacity)
for 404
Assault807
and
Stephan
Seduced
style as demand2.125
become
lower 524 1048 0,471
ie
$133 600
900
1.000 1.100 950
1.113
Seduce
Reserve
later production
capacity)
and
d
$73 4.600
4.300 3.900capacity
4.000 (reactive
4.300 3.000
4.017 for Daphne
556
1113
0,139
Anita

$93 4.400

Anita style as demand become higher

3.300

3.500

1.500

4.200

2.875

3.296

1047

2094 0,318

From$148
the1.700
data, 3.500
it can be
concluded that the forecast will be
benefit
as
2.600 2.600 2.300 1.600 2.383
697
1394 0,292
it provide information about risk based production planning

Daphne

4# OPERATIONAL CHANGES
1. Increasing product quality in China and make
China as basis production due to China has
more capacity production

2. Reduce lead time in preparation of raw

materials with increasing safety stock
3. Reducing various model of product and
focused on popular product based on
previous season sales
4. Increasing product capacity in China with
using more subcontractors
5. Collect feedback data from the retailers in
order company has representative data to
forecast the demand more accurate

5#PRODUCTION OPTIONS
HONG KONG

CHINA

Advantages:

Advantages:

1. Good quality
2. Fast production
3. Cross-trained workers
4. Low unemployment

1. Low labor cost

2. Large quantity
3. Long working hours

Disadvantages:

Disadvantages:

1. High labor cost

2. Less workers (they prefer
office jobs)
3. Less quantity

1. Less quality and

cleanliness conscious
2. Workers trained for single
operation only
3. Slow production

OUR SUGGESTIONS
5#
Short-term
sourcing

HONG KONG

But...

Short-term
sourcing if high
order quantity
is needed
&
Long-term
sourcing

CHINA