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Reebok NFL Replica Jerseys: A Case for Postponement

Question 1:

Reebok should prepare blank jerseys. This means that it should have a stock of blank

jerseys, and come up with an inventory that has more blank jerseys than dressed ones, which

would facilitate easier responses to the demands of customers.

Question 2:

Reebok’s goal should be to meet the target quality of its products. This means that is

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should reduce its inventory. The company can achieve both because through this, it would be

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able to produce products that are based on forecast.

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The service level, which should be provided for Reebok’s customers is mainly sale of

these jerseys, which is the most basic type of service provided by the company.
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Question 3:

These models are helpful because of the company’s joint usage of known demand and
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forecast to place orders to their suppliers.

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With regards to the cost of underage for dressed jerseys:

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Cost associated with dressed jerseys = $10.9

Therefore, cost incurred for the underage for dressed jerseys is given by $2.4 + $9.5 =
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$11.9

The cost incurred for the overage for a dressed jersey is given by: $10.9 - $7.0 = $3.9

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Reebok can decide to choose between blank jerseys and dressed jerseys through

reviewing the order and minimum order quantity, and through reviewing unexpected demand and

hot-market items.

Question 4:

The optimal quantity to order for each player is given by:

Overage cost = $10.9 - $7= $3.9

Underage cost (Blank Available) =$1

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Underage cost (Blank unavailable) = $24 - $10.9 = $13.1

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This means that the critical ratio is 0.33, meaning that the newsvendor can purchase 5100
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dressed jerseys.
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With regards to blank jerseys:

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Overage costs = $9.5 – $8.46 = $1.04

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Underage cost = $24 – $11.90 = $12.10

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This means that the Probability of not stocking out of blanks = 0.92
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Therefore, the number of blank jerseys to be purchased is 71,000.

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This means that the expected profit is $1.04 million.

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The expected leftover at the end of the season, judging by the results shown above, is that

the dressed jerseys will be more that the blanks due to increase in demand for the blanks (Bowen,

William and Sosa).

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Works cited
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Bowen, William G., and Julie Ann Sosa. Prospects for Faculty in the Arts and Sciences: A Study

of Factors Affecting Demand and Supply, 1987 To 2012. Princeton University Press,

2014.

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