1. Repeat your methodology and assume how that all 10 styles are made in China.

What is
the difference (if any) between the two initial production commitments?

Answer :

By using the same methodology and same data, here is the data comparisson 10 styles
made in Hong Kong and China

Table 2.20
SAMPLE BUYING COMMITTEE FORECAST, 10 STYLES OF WOMEN'S PARKAS

Average Produce
Individual Forecast SD 2 x SD Hong Kong China
Forecast Average

Style A B C = 2xB D = A-C Min order = 600 Min order = 1200

Gail 1.017 194 388 629 629 1.200
Isis 1.042 323 646 395 600 1.200
Entice 1.358 248 496 863 863 1.200
Assault 2.525 340 680 1.845 1.845 1.845
Teri 1.100 381 762 338 600 1.200
Electra 2.150 404 807 1.343 1.343 1.343
Stephanie 1.113 524 1.048 65 600 1.200
Seduced 4.017 556 1.113 2.904 2.904 2.904
Anita 3.296 1.047 2.094 1.202 1.202 1.202
Daphne 2.383 697 1.394 990 990 1.200
Total 20.000 9.428 10.572 11.576 14.494

The different between production in Hong Kong and China are :

• Inventory

• Total Cost

• Operation Time

• Quality (% repair)
 Hong Kong Ops Time
Produce China Excess Inventory Total Cost Quality
Style Hong Kong Excess min China Different
Average min Order different Different ($) (% repair)
Order (Week)
Gail 629 629 - 1.200 571 571
Isis 395 600 205 1.200 805 600
Entice 863 863 - 1.200 337 337
Assault 1.845 1.845 - 1.845 - -
Teri 338 600 262 1.200 862 600
Electra 1.343 1.343 - 1.343 - -
Stephanie 65 600 535 1.200 1.135 600
Seduced 2.904 2.904 - 2.904 - -
Anita 1.202 1.202 - 1.202 - -
Daphne 990 990 - 1.200 210 210
Totals 10.572 11.576 1.002 14.494 3.921 2.918 57.129 21 1.218

2. What operational changes would you recommend to Wally to improve performance?

Answer :

Following the operations changes recommended to Wally to improve performance, the key
problems are :

1. Ski Clothes is fashionable product, Its life cycle is short;

2. Long time of planning and production activities

3. Uncertain forecasting due to customer demand

So, the operational changes must be :

1. Improve the demand forecasts made by commitee. Should use a wheighted average
method instead of just using simple average;

2. Obtaining market feedback earlier than Las Vegas which can help converting some
Speculative production to reactive production. For maximising the value of this
feedback Sport Obermeyer’s should include both small and large retailers and Urban
and resort retailers;

3. Pedicting customer demand for individual styles and also if possinle reducing number
of styles being handled.

Production System

1. Increasing quality of production in China;

2. Reducing lead time of production specifically for preparation of raw materials;

3. Decreasing lead time for finished goods, which in turn will help to cater to existing
capacity.

Supply Chain

1. Increasing bargaining power with suppliers by ordering from big supplier who can
commit to be on time;

2. Establish distribution centre;

3. Increasing service level requirements.

Information System

1. Collect old data and analyze demand that will make a better forecast;

Using historical data to capture the market trend and market movement