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Analysis of The Sport Obermeyer Case EXECUTIVE SUMMARY

Sport Obermeyer is an American skiwear company facing problems with long lead times between design and production, inaccurate sales forecasts leading to excess inventory, and deciding where to schedule production between factories in China and Hong Kong. Recommendations include tailoring order quantities to each factory's minimum lot sizes, selling excess inventory in new markets, and increasing production flexibility. Operational changes like reducing SKUs and design-to-production times could help. Sport Obermeyer needs to address uncertainties in demand for short-life-cycle products and determine optimal order allocation between factories for the short and long term.

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Amisha Singh
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557 views1 page

Analysis of The Sport Obermeyer Case EXECUTIVE SUMMARY

Sport Obermeyer is an American skiwear company facing problems with long lead times between design and production, inaccurate sales forecasts leading to excess inventory, and deciding where to schedule production between factories in China and Hong Kong. Recommendations include tailoring order quantities to each factory's minimum lot sizes, selling excess inventory in new markets, and increasing production flexibility. Operational changes like reducing SKUs and design-to-production times could help. Sport Obermeyer needs to address uncertainties in demand for short-life-cycle products and determine optimal order allocation between factories for the short and long term.

Uploaded by

Amisha Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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This report deals with the analysis of the Sport Obermeyer case, an American company, founded in

1947, specialized in the creation of ski wear. The case presents some problems faced by the
company as a long time since the design to production and placement of the product for sale. In
addition, the company is struggling with the sales forecast, which ends up generating excess
production and inventory in stores. And yet, an important decision on how the company should
schedule production, which is divided between the factories in China, where labor cost is cheaper,
and Hong Kong, where there is greater efficiency in production. Therefore, among the problems
identified, recommendations are presented, initially, is to tailor the order quantity according to the
minimum lot size of each locality, China and Hong Kong 1,200 units, 600 units. The excess inventory
of finished goods could be sold in new markets. And the demand uncertainty problem could be
solved by increasing the response capacity of production. This will allow reducing mismatch costs
and consolidating activities. In addition, problems with the production can be minimized by means of
negotiations with suppliers, retailers and joint ventures in order to obtain better operating
conditions and reduction of lead time. So, the operational changes suggested involving reduction of
SKU’s and reducing the time between the product design and the first output. To change the current
reality of Sports Obermeyer, some changes could be introduced, such as reducing the time between
design and first production, reducing SKU's close work with retailer champions, improvement in cost
reduction in China and Hong Kong. These measures would involve, for example, stakeholders in the
business, such as retailers and factories. Thus, to implement these measures, the Sports Obermeyer
should consider some actions in the short and long term. Sport Obermeyer is a high-end fashion
skiwear design and merchandising company. Though Sport Obermeyer ski wears were profitable
(24% expected profit), they still lack the experience for the shortlife-cycle products with uncertain
demand and shortening the lead time. In addition, Sport Obermeyer should consider the order
allocation between HK and China for the short term and long term. This case Page | 4 created the
framework for the operational improvement, for example, inventory efficiency, lead time of
production and raw material, and efficiency small lot production. Sport Obermeyer, Inc. is a ski
apparel company facing a dilemma in ordering production of its products. The Company has high
costs for both over-ordering and under-ordering in a single season. The question currently facing
management at Sport Obermeyer is to determine the order quantity for its first phase of production.
At this point in time, management has very limited insight to the demand for particular styles for the
upcoming ski seaso

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