Sports

Obermeyer
Presented by
Group 4
Ruchi Sao (13PGP048)
Geeta Hansdah
(13PGP079) Trisha
Gajbhiye (13PGP116)
Bhavana Ziradkar (13PGP118)
Sai Shilpa (13PGP124)
 Introduction

• Sports Obermeyer was founded in 1947 by Klaus Obermeyer.

• It is a Fashion skiwear manufacturer. It offers wide variety of ski apparels such
as
parka, vest, , ski suits, sweaters etc.
• The company estimated US $32.8 million sales for year 1992.
• It had 45% market share in children’s skiwear and 11% in adult skiwear.
• Obersport is joint venture betweent Raymond Tse and Klaus Obermeyer.
• It contributes to major production of Sports Obermeyer in Hong Kong and
China.
 Company
Structure Ski
Retail
Stores
Sports Direct
Obersport
Obermeye Mall
r Retailers
Departmental
Stores
 Question
1
• Using the sample data given in Exhibit 10, make a recommendation for
how many units of each style Wally Obermeyer should order during the
initial phase of production. Assume that all ten styles in the sample
problem are made in Hong Kong, and that Obermeyer's initial production
commitment must be at least 10,000 units.
 Answer
1
• As per Wally’s estimation:
• Obermeyer earned 24% of wholesale price on each parka it sold.
• Approximated loss in each unsold parka was 8% of wholesale price.
• Stock out = 1-α (α is service level).
• Assuming : Probability of meeting the demand during lead
time = Probability of earning profit.
𝑡)+ /(•𝑃𝑖 𝛼𝑓 =
𝑖𝑘𝑠𝑓𝑜𝑡𝑖𝑟𝑅 𝑜𝑟𝑃
 Contd
…
t distribution
• α = 24/(24+8) = .75
• 1- α = .25 (Probability of stock out)
• At degree of freedom infinity and at .
75 the value of t = .674 i.e. value of
Z.
Required Quantity 10000
Z value 0.6745
Average Production Production
Style 2 * Standard Order to HK
Forecast Quantity X= ϑ + Zσ Quantity
deviation
Gail 1017 388 1278.7 485.1 600
Isis 1042 646 1477.7 560.6 600
Entice 1358 496 1692.6 642.1 642.1
Assault 2525 680 2983.7 1131.9 1131.9
Teri 1100 762 1614.0 612.3 612.3
Electra 2150 807 2694.3 1022.1 1022.1
Steph
a nie 1113 1048 1819.9 690.4 690.4
Seduc
e d 4017 1113 4767.7 1808.7 1808.7
Anita 3296 2094 4708.4 1786.2 1786.2
Daphne 2383 1394 3323.3 1260.7 1260.7
Total 20000 26360.2 10000
 Question
2

• What Operational changes would you recommend to Wally to

improve performance?
 Answer
2
Recommendation 1 : Recommendation 2 :
• As per exhibit 10, standard • Reduce lead time by developing
deviation in the forecasting supplier network.
method is high. • Increasing the proximity between
• Weighted average forecasting the supplier and manufacturing
method can be used to plant.
increase forecasting accuracy.
 Contd
…
Recommendation 3 Recommendation 4
• Increase the efficiency of Chinese • Non standard zippers from Japan has
workers by providing training. lead time of at least 90 days.
• Provision of cross functional training • Reduce the lead time by searching
to Chinese workers. manufacturers for non standard zippers
In China or Hong Kong.
 Question
3

• How should Obermeyer management think (both short-term and

long- term) about sourcing in Hong Kong versus China?
 Answer
3
• On long term perspective , the company can shift its manufacturing base
to Hong Kong based on below points:
• Lead time reduction
• Minimum order quantity reduction
• Increase in efficiency
• No quota constraint like China
Thank
You