| Write-up of the Case # 1:Sport Obermeyer
Case discussion questions
1. What is the lead time for production of skiwear? What are the factors that contribute to lead times being so long? What are the operational and competitive results of these long lead times? The lead time for production of skiwear is 10 months from Obermeyer places the first production order with Obersport from Nov 92 (order’s placement) to finished goods are delivered to retailers for 93-94 line on Aug 93 (order’s receipt), taking form Table 2-14, “Raw Material Sourcing and Production” paragraph in page 69, and Table 2-15. The factors that contribute to lead time being so long are the following: * The long lead times of nonstandards zippers made in Japan (≥ 90 days). * The long lead times of dyeing subcontractors (45-60 days). * The long lead times of printing subcontractors (45-50 days). * The available capacity for full-scale production could be improved (Sport Obermeyer produces near to 200,000 units each year, the maximum production capacity at all factories for cutting and sewing is 30,000 units per month: it takes around 7 months). These long lead times have negative operational and competitive results because if the time in raw material sourcing and production stages was reduced, Sport Obermeyer could ships all of its products from China by ship and not by airplane before the available quota permitted by United States government for this product category being fully used. Of course, the reduction in these costs would give a competitive advantage to Sport Obermeyer because the product price could be reduced. 2. The company has just realized that they can use differences in individual forecasts made by members of the buying committee to estimate the standard deviation of demand for various products, styles, and colors. How are they able to use this information to make better production decisions? Wally did the data collection and analysis for the forecast...
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