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Unformatted text preview: Homework Hints You may wish to give an initial read of the homework problem and then sketch your initial approach to solving each problem. The case describes the forecasting, planning, and production processes of a global skiwear supply channel. This case typifies the problem with a volatile demand coupled with a long lead time. On the other hand, the products have a short life cycle with a fair amount of demand uncertainty. The company is a high-end fashion skiwear design and merchandising company headquartered in Aspen that sells its products through U.S. department stores and ski shops. Although the company has a global supply network, most of its critical outerwear products are sourced through its Hong Kong-based joint venture. The case provides a close description of the planning and production processes that the company and its suppliers undergo each year to develop and deliver the product line. There is a specific emphasis on the nature of the information that flows among the members of the supply chain and the timing of key decisions and events. Risk-based Production Sequencing Risk-based production sequencing refers to using speculative production capacity to make low-risk products. You also may postpone production of higher-risk products until after additional market information reduces their demand uncertainty. You should define the risk of producing a unit to be the expected cost of mismatched supply and demand for that unit. As additional market information is gathered, the uncertainty about whether a unit will sell is reduced, thereby reducing the unit's expected cost of mismatched supply and demand. The case also introduces a method of generating probabilistic forecasts based on the subjective point forecasts of a set of individuals. This reinforces the importance of using probabilistic forecasts for production planning. Ill be presenting a contrary view in applying this method to other types of forecasts, but for this case, this proves to be a useful method. I Cant Help Myself Comments From analyzing this case, it should create an appreciation for: shorter lead times, smaller minimum order requirements, increased reactive capacity; improved market information; reducing the expected costs of stockouts and markdowns. Question #3 Hints Depending upon the feedback from the groups, I might give hints about how to approach the other questions, but I think I already partly answered them. Youll need to elaborate and thats really 75% of it: building the case for your assertions. The production planning is a mathematically challenging stochastic optimization problem. You are not expected to formally structure or solve the problem in this fashion, but should be able to identify key issues....
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This note was uploaded on 05/12/2010 for the course ESI 6323 taught by Professor Guan during the Summer '09 term at University of Florida.
- Summer '09