Executive summary: Sport Obermeyer starts it humble beginning during the last 1940’s. Klaus a German immigrant was teaching at an Aspen Ski School, when he noticed that his student was cold and miserable because of impractical clothes. At first he would begin to travel Germany during the summer and buy clothes and bring back to the US for his students. Being an engineer himself, he started designing skiwear and ski equipment. Over the years, Sport Obermeyer developed into a prominent competitor in the U.S. skiwear market: estimated sales in 1992 were $32.8 million. The company held a commanding 45% share of the children’s skiwear market and 11% share of the adult skiwear market.
In 1985, Klaus Obermeyer teamed up with Raymond Tse to establish Obersport Ltd. This joint venture was used to coordinate production of Sport Obermeyer products in the Far East. Obersport was responsible for fabric and component sourcing for Sport Obermeyer’s production. Materials sourced were cut and sewn either in Raymond Tse’s own “Alpine” factories or in independent subcontractors located in Hong Kong, Macau, and China. Raymond was owner and president of Alpine Ltd., which included skiwear manufacturing plants in Hong Kong as well as a recently established facility in China. Obermeyer would cover 80% of Raymond Tse business.
For this case, we will focusing on the skiwear part of the Obermeyer business. It has a current cycle time of 27 months. Considering that what we are selling is short life cycle product with very variable demand. The numbers that practically drives the business mostly comes from the Las Vegas show. Out the 27 months cycle, Obersport has only has 6 months to purchase, produce and deliver the products for winter selling in North America. Obersport is located in the Far East and currently his supplier lead-times is are really long and minimum orders is quite high.