BSG Player Guide Questions and Answers
The combined effect of these factors is reliably expected to produce 7-9% annual growth in global demand
for athletic footwear for Years 11-15, slowing to about 5-7% annual growth during Years 16-20. But the
projected growth rates are not the same for all...
BSG Player Guide Questions and
Answers
the IFF's S/Q rating formula calls for a 1-star reduction in the S/Q rating on all unsold
branded pairs carried over in inventory to the following year since they represent last
year's styles. Ratings are updated annually - answer
IFF personnel then take the S/Q ratings at each plant and, based on where each plant's
output is shipped and on the S/Q ratings of pairs in unsold inventory, calculates S/Q
ratings for each company in each geographic region where its shoes are available for
sale. Companies thus have as many as 8 S/Q quality ratings—one each for branded
and private-label shoes offered for sale in North America, Europe-Africa, Asia-Pacific,
and Latin America. - answer
company's S/Q rating in each market segment is a weighted average of the S/Q ratings
at the plants from which the pairs were shipped, adjusted up or down for the S/Q ratings
of unsold pairs in inventory. - answer
all forecasts are averages per company and assume that market growth averages 6% in
North America and Europe-Africa (the midpoint of the 5-7% projected range) and 10%
in Asia- Pacific and Latin America (the midpoint of the 9-11% projected range). - answer
The IFF's S/Q rating of shoes produced at each plant is a function of five factors: (1)
current-year spending per footwear model for new features and styling, (2) the
percentage of superior materials used, (3) current-year expenditures for Total Quality
Management (TQM) and/or Six Sigma quality control programs, (4) cumulative
expenditures for TQM/Six Sigma quality control efforts (to reflect learning and
experience curve effects), and (5) current-year expenditures to train workers in the use
of best practices. - answer S/Q rating of 0 to 10 stars to each company's branded
footwear offerings
Retail markups over the wholesale prices of footwear manufacturers can run anywhere
from 40% at discount chains to as high as 100% at premium retailers. - answer
online sales to individuals are projected to grow from 5% to 15% of total branded sales
in each geographic region by Year 20. - answer
The added production volume from being a successful low-bidder to supply private-label
shoes to chain retailers helps spread fixed costs over more pairs and can improve
overall financial performance (provided the price received for producing the private-label
shoes is above the direct costs per pair). - answer
, The diversity of buyer demand gives manufacturers room to pursue a variety of
strategies—from competing across-the-board with many models and below-average
prices to making a limited number of styles for buyers willing to pay premium prices for
top-of-the-line quality. - answer
Tasks are divided among production workers in such a manner that it is easy to
measure individual worker output and thus create incentive compensation tied to
piecework. - answer this is why piecework incentives can induce greater output per
worker
Training production workers in the use of best practice procedures at each step of the
manufacturing process has recently become important to minimizing the reject rates on
pairs produced. - answer
materials prices fall whenever global production levels drop below 90% of global
production capacity and materials prices rise when global production levels rise above
110% of global plant capacity. - answer market prices for both standard and superior
materials will drop 1% for each 1% that global shoe production is below the 90%
capacity
the prices of both standard and superior materials will go up 1% for each 1% that global
production levels exceed 110%
the going market prices of standard and superior materials in any one year deviate from
their respective base prices whenever the percentage mix is anything other than 50%
for standard and 50% for superior materials. - answer
shoes can be manufactured with any percentage combination of standard and superior
materials. - answer
One way to guard against adverse changes in tariffs and exchange rates is to maintain
a production base in each of the four geographic regions and rely upon those plants to
satisfy demand for the company's branded footwear in their respective region - answer
The combined effect of these factors is reliably expected to produce 7-9% annual
growth in global demand
for athletic footwear for Years 11-15, slowing to about 5-7% annual growth during Years
16-20. But the
projected growth rates are not the same for all four regions, as indicated in the table
below: - answer North America &
Europe-Africa
5-7% Years 11-15
3-5% Years 16-20
online sales to individuals are projected to grow from 5% to 15% of total branded sales
in each geographic region
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