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Measure of risk associated with ordering policy

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1. Using the sample data given in Table 2-20, make a recommendation for how many units of each style Wally should make during the initial phase of production. Assume that all of the 10 styles in the sample problem are made in Hong Kong and that Wally's initial production commitment must be at least 10,000 units. Ignore price differences among styles in your initial analysis.

2. Can you come up with a measure of risk associated with your ordering policy? This measure should be quantifiable.

3. Repeat your methodology and assume now that all 10 styles are made in China. What is the dif-ference (if any) between the two initial pro-duction commitments?

4. What operational changes would you recommend to Wally to improve performance?

5. How should Wally think (both short-term and long-term) about sourcing in Hong Kong versus China? What kind of sourcing policy do you recommend?

Reference no: EM133022701

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