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Sport Obermeyer

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SPORT OBREMEYER
Sport Obermeyer designs and sells high-end skiwear from Colorado. Their products are sold in US departmental stores and specialty ski shops. Most of its production is carried out in honk Kong and china by its partner, Obersport. Annual production capacity is approximately 200,000 units. The minimum production quantity in Hong Kong is 600 units and 1200 units in china. They earn a 24% profit on whole sale price on every product and losses 8% on discounted sales.
There are many challenges strangling this company as they serve fashion wear which are highly unpredictable. They have long lead times due to uncertain forecasts and geographical distance. The life cycle of their products are short leaving no time for comfortable manufacturing process. They have a seasonal demand with most of their sales happening during one quarter of the year. In case of stock outs they lose their 24% margin and make 8% losses on over stocked goods or marked down prices. This results in high holding costs.
This highly volatile demand requires them to produce in two phases. One batch of production is to be carried out based on initial forecast and the other batch after the las vegas event requiring highly flexible supply and manufacturing process.
The following exhibit shows the demand forecasts for 20000 units.

STYLE | LAURA | CAROLYN | GREG | WENDY | TOM | WALLY | PRICE | Gail | 900 | 1000 | 900 | 1300 | 800 | 1200 | 110 | Isis | 800 | 700 | 1000 | 1600 | 950 | 1200 | 99 | Entice | 1200 | 1600 | 1500 | 1550 | 950 | 1350 | 80 | Assault | 2500 | 1900 | 2700 | 2450 | 2800 | 2800 | 90 | Teri | 800 | 900 | 1000 | 1100 | 950 | 1850 | 123 | Electra | 2500 | 1900 | 1900 | 2800 | 1800 | 2000 | 173 | Stephanie | 600 | 900 | 1000 | 1100 | 950 | 2125 | 133 | Seduced | 4600 | 4300 | 3900 | 4000 | 4300 | 3000 | 73 | Anita | 4400 | 3300 | 3500 | 1500 | 4200 | 2875

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