Please explain what numbers you used.

242, Chapter 9 Sales and Operations Planning in a Supply Chain Management at Gulmarg Skis was surprised in the pre provided by 60 workers. Given the high skill CASE STUDY Promotion Challenges at Gulmarg Skis vious season when a competitor, Kitz, discounted their ments, the company had difficulty finding suitable skis by $50 in October. In a market in which discounting ple and as a result could hire only up to a mi was rare, this was an unusual move by kit. As a result, 10 temporary employees, in other words, the number ber and January. The company did not want to be caught cach temporary employee cost $500, and lettista Gulmarg saw a significant drop in sales between Octo employees could fluctuate between 60 and 70. Hun unprepared for the upcoming season and was planning one go cost another 5800. its response. Two alternatives being considered by Gul- marg were to promote in October or December Gul in the form of expensive carbon fiber, plastic, and alloy Each pair of skis used material worth $300 ml marg could not precisely predict what it would do Carrying a pair of skis in inventory from one month regarding promotions but felt that Kitz was likely to the next cost $10. Given the seasonal nature of demand repeat its October promotion, given its success in the Gulmarg started October with an inventory of 2.000 pairs of skis and preferred to end in March with so previous year Gulmarg and Kit competed in high-performance inventory to carry over. Any leftover inventory at the end skis and sold direct to end consumers. The companies of March cost Gulmarg the equivalent of $500 a pair prided themselves on outstanding craftsmanship. using because of the discounting required to sell it. Custom only the best materials. Both were known for the high were not willing to wait for skis, so Gulmarg lost quality of their skis and the fact that customers could sales that it could not meet in a month because of inst design their own top sheet. Although each company had ficient inventory and production. Gulmarg's skis we a loyal following there was a significant fraction of cus. normally priced at $800 a pair. tomers who were happy to buy skis from either. It is this Before making its production plans, Gulmarg had group that the two companies were competing for done market research to fully understand the impact of through price discounts. promotions on customer behavior. Dropping price from The sale of skis was highly seasonal with all sales $800 to $750 attracted new customers, but also resulted occurring between October and March, as shown in in existing customers shifting the timing of their per Table 9.9. Production capacity at the manufacturing chase to take advantage of the discount Customer plant was limited by the number of employees that Gul- behavior was also affected by actions taken by the com marg hired. Employees were paid $15/hour for regular petitor, Kitz. If only one of the two companies prom. time and $23/hour for overtime. Each pair of skis in a given month, it saw a 40 percent increase in sales for required 4 hours of work from an employee. The plant the month and a forward movement of 20 percent worked 20 days a month, 8 hours a day on regular time. Overtime was restricted to a maximum of 40 hours per demand from each of the three following months employee per month. Gulmarg employed a total of 60 other words, If Gulmarg promoted in October bet ko workers and felt that it could not let any of them go, even did not, Gulmarg observed a 40 percent increase October demand and a shift of 20 percent of demand in months when demand was below the capacity from November December, and January to October competitor that did not promote experienced a 20 p TABLE 9-9 Demand Forecast for Gulmarg Skis cent drop in sales for the promotion month and a 10 Month Demand Forecast cent drop in sales for each of the three following moos If one of the companies promoted in October and the October 1,600 other in December, changes in demand were comune November 2,400 with the October promotion having the first impacto December 4,200 lowed by the December promotion. In other words January 3,800 demand for each company shifted from that provided February 2,200 Table 9-9 based on the October promotion. The Dee March ber promotion then affected the revised demand for 2,200 example, if Kitz promoted in October and Gulsa chose to promote in December, Gulmarg would absor Chapter 9 Sales and Operations Planning in a Supply Chain 243 120 percent drop in demand in October and a 10 percent February and March would be based on demand not compared with the figures in Table 9.9. The December panies promoted in a given month, each experienced a promotion would then increase demand in December by growth of 10 percent for that month and forward buying w percent of the reduced amount (because of the earlier equivalent to 20 percent of demand from each of the K promotion). Similarly, forward buying from Janu. I would also be based on the reduced amount because three following months Should Gulmarg promote? If so, in which month of the October promotion by Kitz. Forward buying from should it promote? If not, why not? Laqu2 5 tinoniydo nis nibydes Coo of als od way valsam di E.ON que el nombro oggi ang amo bror que si no nivoqmimo bergab doon