Professional Documents
Culture Documents
Sportober
Sportober
Sportober
Objectives
Supply Chain Choices & Operations Strategy Product Category challenges Operational changes that reduce costs of mismatched supply and demand Coordination Issues in a global supply chain
Type of Product
Cost Quality Time (delivery, lead time, etc) Flexibility (multiple choices, customization) Sustainability
Sport Obermeyer ?
3
Supply Side
Demand Side
Over-stock
Under-stock
China
November Pre year
Colorado
Design clothes Make forecasts
US Retailer
November
March
August
Deliver to Colorado
Warehouse
September
February
7
Planning Approach
10
Anita
Daphne
$ 93
$148
4400
1700 20000
3300
3500 20000
3500
2600 20000
1500
2600 20000
4200
2300 20000
2875
1600 20000
3296
2383 20000
104 7
697
2094
1394
Totals
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Using the available data, assess the risk of each suit and come up with a system to determine:
How many of each to style to produce When to produce each style Where to make it
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14
Production Strategy A
Account for production minimum
If we assume same wholesale price, we want to produce the mean of a styles forecast minus the same number of standard deviations of that forecast i.e., mi-ksi (k is same for all).
Approach: produce up to the same demand percentile (k) for all suits.
Sum (m-ks)each style = 10,000 (meet production minimum)
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Q= m-ks 2837 1804 1295 1076 905 832 606 357 292 2 10008
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Large production minimums force us to make either many parkas of a given style or none.
How do we consider the batch size minimums for the second order cycle?
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m= minimum order quantity (600 here) SAFE: Styles where demand is more than 2X the minimum order quantity (well have a second order commitment) SOS: Sort of Safe=expected demand is less than minimum order quantity. If we make em at all, make em first (have to make minimum) RISKY: demand is between C1 & C2.
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Approach
19
Assign Risk
Style Seduced Assault Electra Anita Daphne Entice Gail Isis Teri Stephanie Avg. of Forecast m 4017 2525 2150 3296 2383 1358 1017 1042 1100 1113 Std. Dev. Forecast 1113 680 807 2094 1394 496 398 646 762 1048 Risk Type Safe Safe Safe Safe Safe Safe Risky Risky Risky Risky
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Modified Approach
Determine how many styles to make to give total first period production quantity.
Assess each case by determining the optimal quantities for non-risk suits using Production Quantity = Max(600, mi-600-k*si) Same approach as before (determine the appropriate k so that lot size <10,000)
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Example:
9961.96
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Team Breakout 2
What supply chain & operations changes can be implemented to reduce stock-outs and mark-downs?
Design, production, forecasting, etc.? Specific: How are you going to do it, Actions?
25
26
5.8
27
Capacity Changes
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Lead Times
30
Lead Times
31
Printed
SKU
SKU
SKU
32
33
Using buying committee to develop probabilistic forecast of demand and variance (fashion risk) Assess overage and underage costs to develop relative costs of stocking too little or too much Use Model to determine appropriate initial production quantities (low risk first) Read early demand indicators Update demand forecast 34 Determine final production quantities