1. Using the sample data given in Exhibit 10, make a recommendation for how many units of each style Wally Obermeyer should order during the initial phase of production. Assume that all ten styles in the sample problem are made in Hong Kong, and that Obermeyer's initial production commitment must be at least 10,000 units. (Ignore price differences among styles in your initial analysis).Hints:
   • You must place orders for at least 50% of the annual demand.
   • There is a limited production capacity (only about 50% of total). The rest is available for the Las Vegas show.
   • The earlier capacity should be used to produce the least risky items.
   • What is the risk in this context?
   • Items with high variability in demand (can result in large overstocking).
   • Items that are very expensive (overstocking can be very expensive).
   • For this exercise, we are not considering the price. So, focus only on the variability.
   • Also, focus on the minimum production requirement for any item 600 units.
   • Variability of demand is also called Coefficient of Variation (Std. Deviation/Mean).
   • 

Exhibit 10 Sample Buying Committee Forecasts, 10 Styles of Women's Parkas Individual Forecasts Average Forecast Standard Deviation 2 x Std. Deviation Style Pricea Laura Carolyn Greg Wendy Tom Wally Gail $110 900 1,000 900 1,300 800 1,200 1,017 194 388 Isis $99 800 700 1,000 1,600 950 1,200 1,042 323 646 Entice $80 1,200 1,600 1,500 1,550 950 1,350 1,358 248 496 Assault $90 2,500 1,900 2,700 2,450 2,800 2,800 2,525 340 680 Teri $123 800 900 1,000 1,100 950 1,850 1,100 381 762 Electra $173 2,500 1,900 1,900 2,800 1,800 2,000 2,150 404 807 Stephanie $133 600 900 1,000 1,100 950 2,125 1,113 524 1,048 Seduced $73 4,600 4,300 3,900 4,000 4,300 3,000 4,017 556 1,113 Anita $93 4,400 3,300 3,500 1,500 4,200 2,875 3,296 1,047 2,094 Daphne $148 1,700 3,500 2,600 2,600 2,300 1,600 2,383 697 1,394 Totals 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Obermeyer's wholesale price Notes Laura Kornashiewicz was marketing director Carolyn Gray was customer service manager Greg Hunter was production manager Wendy Hemphill was production coordinator Tom Tweed was a sales representative Wally Obermeyer was vice president