Sport Obermeyer Case Essay

2438 Words Feb 24th, 2010 10 Pages
Obermeyer Sport
A Strategic Direction in Forecasting

Introduction & Summary

Klaus Obermeyer is an innovator in the high-end skiwear industry. The company began with down filled jackets and slowly began to diversify its product line with high-altitude suntan lotion, turtlenecks, nylon wind-shirts, mirrored sunglasses and more. In 1961, the first Sport Obermeyer factory warehouse opened in Aspen, and the innovations continued with “soft-shell” jackets, double lens goggles, and the first waterproof-breathable fabrics to be used in clothing.

Sport Obermeyer is a high-end fashion skiwear design and merchandising company with its headquarters located in Aspen, Colorado. The company specializes in selling its products in U.S.
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Ie inflation rate, money supply, and housing starts

• Technological forecasts predict the rate of technology progress and impact the development of new products

• Demand Forecasts predicts sales of existing products and services. This is the type of forecasting relevant to the Obermeyer case. [6]

The Importance of Forecasting

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Forecasts are based on statistics, and they are rarely perfectly accurate. Because forecast errors are a given, companies often carry an inventory buffer called "safety stock". Moving up the supply chain from end-consumer to raw materials supplier, each supply chain participant has greater observed variation in demand and thus greater need for safety stock. In periods of rising demand, down-stream participants increase orders. In periods of falling demand, orders fall or stop to reduce inventory. The effect is that variations are amplified as one moves upstream in the supply chain (further from the customer). The causes can further be divided into behavioral and operational causes:

Behavioral causes to forecasting

• Misuse of base-stock policies • Misperceptions of feedback and time delays • Panic ordering reactions after unmet demand • Perceived risk of other players' bounded rationality
Operational

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