1.

Internal Design Process (prototype production) Feb 92 - Sept 92 Potential improvements * no mention for example of say customers involved in the design process to help make it a customer-designed product instead of Obermayer mgmt driving the design; this, in turn, could potentially help to cut down the time and quantity for producing and choosing prototypes and samples * centralized DC in Denver - due to the likely regionality in customer base and sales, possibly a few regional DC's could be a better distribution solution; this would need to be weighed against the advantage of risk pooling * replenishments - the case mentions "this demand was filled if Obermayer had the item in stock" - could Obermayer not be conducting a constant, ongoing analysis of demand in tandem with their retailers to identify hot-selling items in order to place sufficient replensihment orders to satisfy demand Sample production (using actual dyes/fabric) March/Arpil 92 Raw Material Sourcing/Production determine fabric/component requirements sewing to begin in Feb 93 Shipment to Obermayer June-July Order Shipments to Retailers August Replenishment Orders Dec/Jan - by Feb, deep discounts to retailers on replensihments

Hong Kong - Seattle-Denver

2. Fabric Procurement Lab Dip 2 weeks Potential Improvements * it is not explicitly stated in the case but it seems that processes like zipper and buckle procurement can be taking place simultaneously with for example the dyeing and printing of fabrics in order to decrease the overall lead time * many suppliers with a wide geographic spread and varying lead times for shell fabric - possible to negotiate with one or two in closer proximity to the China/Hong Kong factories to possiblyreduce both costs and lead times * why such long lead times on zippers? Possibility to use smaller, perhaps more flexible suppliers as opposed to the one large Japanese supplier Screen Development 6 weeks Dye/Print fabrics 4-6 weeks Insulation Procurement 2 weeks Rings/Buckles Etc Procurement 2-4 weeks Zipper Procurement 8 weeks Cut and Sew

3. I do believe that involving the Committee and getting their individual forecasts as opposed to a consensus-driven method will lead to more accurate forecasts. * There is also reference to Wally's use of previous year's forecast and their respective accuracies which clearly is important. However there is no mention of whether in previous years whether for expample there was a tendency for actual demand to be consistently lower than than mean forecasts or vice-versa which might help guide Wally's thinking a bit * Weather could also be an important factor for these particular products so perhaps an analysis of the predicted winter conditions for this particular season could impact demand for certain products (also comparing weather vis--vis actual demand from previous years) * it would also be useful to see how demand over past years has developed and use such trends in the demand development to increase the accuracy of the forecasts

4. Price Gail Isis Entice Assault Teri Electra Stephanie 110 99 80 90 123 173 133 Profit 26,40 23,76 19,20 21,60 29,52 41,52 31,92 Profit rank 5 6 9 8 4 1 3 Avg Forecast 1 017 1 042 1 358 2 525 1 100 2 150 1 113 St. Dev 194 323 248 340 381 404 524 2x St. Dev 388 646 496 680 762 808 1048

Seduced Anita Daphne

73 93 148

17,52 22,32 35,52

10 7 2

4 017 3 296 2 383 20 001

556 1047 697

1112 2094 1394

5.
Price Gail Isis Entice Assault Teri Electra Stephanie Seduced Anita Daphne 110 99 80 90 123 173 133 73 93 148 Profit 26,40 23,76 19,20 21,60 29,52 41,52 31,92 17,52 22,32 35,52 Profit rank 5 6 9 8 4 1 3 10 7 2 Avg Forecast 1 017 1 042 1 358 2 525 1 100 2 150 1 113 4 017 3 296 2 383 20 001 St. Dev 194 323 248 340 381 404 524 556 1047 697 2x St. Dev 388 646 496 680 762 808 1048 1112 2094 1394

6.
First of all Wally must clearly consider the higher labor cost in Hong Kong vis--vis China. Relatedly, Wally must analyse the higher cost/higher productivity tradeoff as well as quality control issues; He must also consider whether China's minimum order quanitities will increasingly become more and more of a burden, especially as consumers become more sophisticated and the Obermayer product portfolio expands to encompass more products; Wally should also consider whether Hong Kong will not be a more flexible location in terms of producing in response to rapidly changing demand - here the lower minimum order of Hong Kong and the fact that they are more highly-trained (cross-trained)O could be a significant advantage.

7.
Increasing reactive capacity will help to bring down markdown costs as well as stockout costs provided that initial minimum production quantities as a proportion of total production is not too high which would eliminate gains made by increasing reactive capacity; the items with the higher standard deviation would be produced using reactive capacity and the items with the lower standard deviations would be produced using speculative capacity.

to retailers on replensihments