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The design process started as early as February 1992 for season 1993-1994. It normally would take three months to finalize the design concepts. The company started prototype production in August, six months after the design process started. Around September, designs were finalized. Sample production would start in October. Design process took about 9 months. Production: Prototype production was in August 1992. In October, the company started sample production. About four months after the sample production, company would start full scale production around January 1993.
The full scale production would end in end of August 1993. The production process took about 10 months from sample production to full scale production. Receiving Orders: The initial order received around November 1992. Second order was from March 1993?Alas Vegas Trade Show. The company normally would receive 80% orders of its annual production volume. Supply Orders: After receiving the first order in November 1992, production department would calculate fabric and component acquirement and place the first production orders of components, print and dye.
Second order would happen after the trade show? receiving major orders from retailers around March 1993. Above all, the lead time for Sport Performer for season 1993-1994 was 9 months: from the company received its first order in November 1992 to 93-94 line delivered to retailers in August 1993. 1. 2 Factors cause long leading time 0 Poor forecasting method: using old ways, Buying Committee, to gather forecast information; also the discrepancies across different committee members’ forecasts were pretty big; 2 1. 3
China?long distance leads increased transportation costs and long delivery time; also it would be hard to quick react to “last minute” demand; Multiple variables: seasonal demand and multiple production lines increased difficulties making production plan; Long lead time’s problem 0 Increase the difficulties of production plan: will increase costs for ordering up- stream supplies; sometimes might encounter shortage of supplies due to short time ordering; 0 High demand of production capability: multiple production lines also require much more set-up time for each production and bigger production capability; Less competitive: hard to get the “real time” information to produce the right products for the market; 0 Low profits: long lead time increase supply chain costs; 0 Low customer satisfaction: long delivery time to retailers would increase costs for retailers?either order large quantity or order more frequently; neither would work well for retailers.
Using the sample data given in Exhibit 10, make a recommendation for how many units of each style Wally Performer should order during the initial phase of production. Assume that all ten styles in the sample problem are made in Hong Kong, (Ignore price differences among styles in your initial analysis. ) get an expected value of different types of Parka suits. After having a look at the numbers, Wally 3 was not able to decide the number of parka for each style to be ordered in the first go. He also had a compulsion to order a minimum number of quantities for each style. According to the table given in Exhibit 10, the sample values are Just 10% of the actual required values. Based on this comparison the minimum amount of parkas which are supposed to be ordered in the first time were 10,000 overall.