orkers in Hong Kong were also able to ramp up production faster than the Chinese workers. This ability, coupled with shorter production lines, enabled the Hong Kong factory to produce smaller order quantities efficiently. For parkas, the minimum production quantity for a style was 1,200 units in China and 600 units in Hong Kong. Obermeyer produced about 200,000 parkas each year. The maximum capacity available to the company for cutting and sewing was 30,000 units a month; this included the production capacity at all factories available to make Sport Obermeyer products.Obermeyer could decrease the amount of risk presented each year by reducing the amount produced for the Las Vegas Fashion Show. Obermeyer's fate is always determined by the outcome of the show. Like most fashion apparel manufacturers, they faced a "fashion gamble" each year. If Obermeyer were to produce 50,000-70,000 units, they would eliminate the excess loss that has occurred in past years. Although Obermeyer invested in a new facility in China, there were still concerns about the quality and reliability of Chinese operations. Chinas labor is also much lower than Hong Kong. The price of producing a variety of styles in Hong Kong would be lesser then producing in China. As mentioned earlier in the paper Hong Kong workers were trained in many different facets of production whereas China's worker were trained in one specific area of production. The price of training and increasing the amount of workers would far exceed Obermeyers input cost. The backbone of Obermeyer's sales is the parkas. It would be in their best interest to produce all the parkas in China were profit would be maximized. The Hong Kong factories should be used to produce the different styles of Obermeyer Ltd.In conclusion, Obermeyer must strategize an effective method of calculating production decisions. Obermeyers initial issues have been due to scant information about how the market would...
