Sport Obermeyer Case

Managing risk in global operations under highly uncertain demand requires a heavy reliance on accurate forecasting. Sport Obermeyer, Ltd is in the business of manufacturing skiwear which includes short life cycle items due to their short selling season and dependence on trends in fashion. Each year Sport Obermeyer is challenged with matching supply to demand because production must be forecasted more than one year ahead of the expected selling season. These forecasts determine how much Sport Obermeyer should produce, but still entail an element of risk. Labor restrictions and production lead times that are significantly longer than the product’s selling season make accurate forecasting of trends crucial to Sport Obermeyer’s business. This analysis will address the production cycle, current challenges, how much product should be ordered, when it should be produced, and where it should be produced for the ’93-’94 selling season as well as some suggested recommendations for improving operational performance.

The Production Cycle:
The cycle time between initial design of ski parkas and the final sale to retailers typically runs from February of the year prior to the selling season through September. This indicates a total cycle time of approximately seventeen to nineteen months, depending on final shipment to the retailers. Final shipment is restricted by production capacity and occurs over the June – August time frame. This is immediately prior to the selling season which begins in September and runs through January of the following year. The time until sale to final end consumer can vary depending on the product and when it is sold during the selling season. This cycle also incorporates several major processes including the development of prototypes and testing them in the market, working trade shows to secure sales, and developing forecasts. An outline of the production process is shown in figure 1 below, leading up to the selling season where products are