Sport Obermeyer Minimum
Wally Obermeyer is facing a challenge in accurately forecasting the market response and demand for the upcoming season. Historically, the company founder, Klaus Obermeyer, relied minimally on forecast data, and more on intuition and artistic tastes. In comparison, his son Wally prefers to make decisions based on analytical techniques and information gathering. If Wally’s approach proves successful, it can change how Sport Obermeyer approaches its manufacturing processes, secure its position long-term as the middle- to high-end producer of skiwear, increase profits, and better meet the company’s objective of delivering matching collections to retailers at the same time and earlier in the season. Sport Obermeyer has many challenges to overcome. Forecasting is problematic since production commitments are required in November, but the bulk of the orders are not placed by retailers until the Las Vegas trade show in the following March. Also, the market trends are seasonal, changing frequently, and adding to the difficulty in forecasting. The company cannot postpone production completion dates due to the quota limit on importation of goods from China, where a bulk of its production occurs. Adding further complications to the manufacturing decisions, the company has a new manufacturing facility coming online in Hong Kong, and must determine what products, and how much of those products should be manufactured in each of the facilities. Issues with vendors of raw materials must be addressed. There are long lead times for some vendors, and because of that, excess inventory is maintained in the manufacturing facilities. The company must also maintain a competitive edge with the growing pressure from competitors, specifically Columbia. Sport Obermeyer has relied on a buying committee comprised of key manager to forecast production demands, and make decisions regarding production commitments. Historically, this committee has done fairly well in predicting which