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SCM Case Reebok NFL Replica Jerseys: A Case for Postponement

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SCM Case Reebok NFL Replica Jerseys: A Case for Postponement

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    1. SCM Case Reebok NFL Replica Jerseys: A Case for Postponement Members: Cherry Sam Robbin Sarah

    2. Outline

    3. Reebok background

    4. About NFL

    5. About NFL

    6. AFC - North and South teams

    7. AFC - West and East teams

    8. NFC - North and South teams

    9. NFC - West and East teams

    10. 2003 Super bowl

    11. Problem I have a warehouse full of jerseys out there and retailers are screaming for the teams and players I don’t have! Every year it seems like we have the right mix of inventory going into the season, and then some team that no one expected to do well gets off to a 4-0 start and the team everyone expected to contend for the Super Bowl Is losing games. Suddenly I have 1000s of jerseys I can’t sell and 1000s of order I can’t fill

    12. Retailer states The Reebok line is great. We’re excited and anxious at the same time. [In the past] the fear was that one team jersey could be found from five different manufacturers at five different stores in the mall. Now the [question] is, will the consumer have to pay an extra $20 for a team jersey because it is from Reebok? As a top-tier retailer in apparel, we’ll only have access to that one brand. I think that Reebok makes great product. We just hope they can deliver because we won’t have options B, C, or D to go to.

    13. Demand for NFL replica jerseys Customer demand fluctuate Driven by the excitement and passions feel for the game. One way to express their support is by adorning the jerseys of the favorites player on the favorites teams. Hot market demand Hot market item (demand), is an item that was either not expected to sell well before the season or an unknown item that had no prior sales expectations. For example : 1. Some team that no one expected to do well gets off and the team everyone expected to contend is losing games 2. Regular player become super star.

    14. Jersey

    15. The sales cycle

    16. Reebok warehouse in Indy Contract manufacturers – Asia, but more and more are being moved to central America and Caribbean (Honduras, El Salvador, DR) Many contract manufacturers – why? Most sales through large sports retailers, and thru distributors.Reebok warehouse in Indy Contract manufacturers – Asia, but more and more are being moved to central America and Caribbean (Honduras, El Salvador, DR) Many contract manufacturers – why? Most sales through large sports retailers, and thru distributors.

    17. Indy has capability to do screen printing – for NFL roughly 30000 jerseys per week. Case does not tell us enough about whether or not this is constraining….but does indicate there are options to outsource locally at 10% premium. It’s more expensive to screen print in Indy than at CM Reebok has postponement opportunity -- but it costs more to dress in Indy than at CM, and there can be capacity and/or QR considerations too.Indy has capability to do screen printing – for NFL roughly 30000 jerseys per week. Case does not tell us enough about whether or not this is constraining….but does indicate there are options to outsource locally at 10% premium. It’s more expensive to screen print in Indy than at CM Reebok has postponement opportunity -- but it costs more to dress in Indy than at CM, and there can be capacity and/or QR considerations too.

    18. Purchase planning

    19. Question

    20. Question 1 Generate team and player level forecast Offer ±20% discount for early order in January-February Prepare 1,728 dressed Jerseys for any player Prepare blank Jerseys (shared with other apparel items) Provide printing facility in the Reebok’s DC (capacity 10,000 Jerseys per day) Outsource the deficit of production local manufacturing

    21. Question 2 The goal: To provide customer with a quality product, in the right time, and in the right quantity. Reebok should minimize its inventory to maximize its profit by reducing holding cost and the risk of leftover in each season Yes, the key is in the forecast. The more accurate, the greater chance to achieve both of the goals. High service level: providing all customer order, including the revised order

    22. Question 3 Yes. Reebok company uses combination of forecast and known demand to place order for their supplier. Forecast developed based on: past sales, team and player performance, market intelligence, advance order, informed guess. Forecast is revised as the sales cycle unfold. Cost of blank jersey = $9.5 Cost of Dressed jersey = $10.9 Cost of decorating a blank jersey in Indianapolis = $2.4 Salvage value = $7 Cost of underage for dressed jerseys: 1.Finished in contract manufacturers: $10.9 2.Finished in Indianapolis: $9.5+$2.4=$11.9 Cost of overage for dressed jerseys: $10.9 - $7 = $3.9

    23. Question 3 Order on July-October: blank Jersey (stored in CM) , January-June: dressed Jerseys (known demand) ,combination of dressed Jerseys (order) and blank Jersey (forecast). Dressed Jerseys are made based on the order and minimum order quantity for each player. While blank Jerseys are alocated for unexpected demand and hot-market item.

    24. Question 4

    25. Question 4

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