About SmartShoe SmartShoe, a division of Modern Champion Apparel, is a medium-sized shoe manufacturer that makes a variety of private-label footwear. It sells its shoes to retail chains, which then place their own in-house brand name on them. SmartShoe specializes in technologyenabled shoes that track an athlete's speed and overall performance using a microchip in the sole of each shoe. A few things to note about the company's process: - SmartShoe uses a labor-intensive, four-step shoe assembly process, in which the amount and quality of the shoes assembled depends on both the employees assigned to perform each step and the quality of the materials used. There is a $2,000 per week cost to use the factory equipment. The cost for each assigned employee varies based on their skill level and length of employment. - SmartShoe can add different features to its shoes, such as appearance enhancements, personalized customizations, or accessories that improve the shoes' wear-ability. - After shoes are assembled and inspected, they are shipped to retail chains. SmartShoe can either ship orders to the chains in batches or ship entire orders all at once. You have just earned a promotion and are now a special project manager at SmartShoe. One of your largest retail customers, AllStar Sports, is running a football (soccer) shoe promotion in three months and needs a very large order of technology-enabled football shoes delivered no later than 10 weeks from today. The factory will not produce any new shoes after the deadline; so any excess materials will be a sunk cost. The special order is so large that no one company can fill the order, so they asked several private-label shoe manufacturers, including SmartShoe, to deliver as many shoes as possible. The contract terms for the order have a variety of important specifications: - The price paid per shoe is determined by the shoe's quality and features, so better quality and more features will lead to a higher price paid per shoe. - The price paid for any shoes received after the 10-week deadline will be reduced by 20%. You must allow half a week for inventory delivery and another half a week for final product shipping, leaving nine weeks for SmartShoe to produce the order. - The materials used to create shoes are not re-usable once a shoe style leaves production. Only order as much inventory as you can reasonably expect to use during your nine-week production period. Your goal is to maximize the profit SmartShoe will earn from this special order. You will make decisions regarding the number of shoes to produce for the special order, material quality, which employees will perform assembly steps, delivery frequency, and what features to include. As you are new to your role, you will have two opportunities to produce the special order. Round 1 is a practice round that allows you to learn about SmartShoe's assembly and delivery processes; Round 2 provides more buying, delivery, and manufacturing choices. Shoe Materials Decide how many shoes you would like to produce, and at what level of quality. Quantity to Order Material Quality ? Additional Options ? ? Join a Buying Group Receive Just-in-Time Delivery None Product Delivery Decide which option will be used to deliver final product to the customer. Delivery Method Fullfillment Method ? ? In-House Outsource Batches Single Shipment ? No Yes Decide your factory's production method Additional Employee Options The Showroom, Round 2 Select optional enhancements to the finished shoes. Price increases relating to enhancements are at the discretion of the client, and in general, higher quality shoes will yield a higher price increase per enhancement. Hint: you know from previous experience that the client won't pay more for an over-embellished product, so consider carefully which features would best fit your product strategy. Shoelace protector $0.25 per unit Buyer may pay up to 2% more Technology improvement Cost \$2.50 per unit Benefit Buyer may pay up to 5\% more Customized flag add-on \begin{tabular}{cl} Upgraded performance insole & Cost \\ \hline Benefit & Buyer may pay up to 3%m \end{tabular} Additional Showroom Options About SmartShoe SmartShoe, a division of Modern Champion Apparel, is a medium-sized shoe manufacturer that makes a variety of private-label footwear. It sells its shoes to retail chains, which then place their own in-house brand name on them. SmartShoe specializes in technologyenabled shoes that track an athlete's speed and overall performance using a microchip in the sole of each shoe. A few things to note about the company's process: - SmartShoe uses a labor-intensive, four-step shoe assembly process, in which the amount and quality of the shoes assembled depends on both the employees assigned to perform each step and the quality of the materials used. There is a $2,000 per week cost to use the factory equipment. The cost for each assigned employee varies based on their skill level and length of employment. - SmartShoe can add different features to its shoes, such as appearance enhancements, personalized customizations, or accessories that improve the shoes' wear-ability. - After shoes are assembled and inspected, they are shipped to retail chains. SmartShoe can either ship orders to the chains in batches or ship entire orders all at once. You have just earned a promotion and are now a special project manager at SmartShoe. One of your largest retail customers, AllStar Sports, is running a football (soccer) shoe promotion in three months and needs a very large order of technology-enabled football shoes delivered no later than 10 weeks from today. The factory will not produce any new shoes after the deadline; so any excess materials will be a sunk cost. The special order is so large that no one company can fill the order, so they asked several private-label shoe manufacturers, including SmartShoe, to deliver as many shoes as possible. The contract terms for the order have a variety of important specifications: - The price paid per shoe is determined by the shoe's quality and features, so better quality and more features will lead to a higher price paid per shoe. - The price paid for any shoes received after the 10-week deadline will be reduced by 20%. You must allow half a week for inventory delivery and another half a week for final product shipping, leaving nine weeks for SmartShoe to produce the order. - The materials used to create shoes are not re-usable once a shoe style leaves production. Only order as much inventory as you can reasonably expect to use during your nine-week production period. Your goal is to maximize the profit SmartShoe will earn from this special order. You will make decisions regarding the number of shoes to produce for the special order, material quality, which employees will perform assembly steps, delivery frequency, and what features to include. As you are new to your role, you will have two opportunities to produce the special order. Round 1 is a practice round that allows you to learn about SmartShoe's assembly and delivery processes; Round 2 provides more buying, delivery, and manufacturing choices. Shoe Materials Decide how many shoes you would like to produce, and at what level of quality. Quantity to Order Material Quality ? Additional Options ? ? Join a Buying Group Receive Just-in-Time Delivery None Product Delivery Decide which option will be used to deliver final product to the customer. Delivery Method Fullfillment Method ? ? In-House Outsource Batches Single Shipment ? No Yes Decide your factory's production method Additional Employee Options The Showroom, Round 2 Select optional enhancements to the finished shoes. Price increases relating to enhancements are at the discretion of the client, and in general, higher quality shoes will yield a higher price increase per enhancement. Hint: you know from previous experience that the client won't pay more for an over-embellished product, so consider carefully which features would best fit your product strategy. Shoelace protector $0.25 per unit Buyer may pay up to 2% more Technology improvement Cost \$2.50 per unit Benefit Buyer may pay up to 5\% more Customized flag add-on \begin{tabular}{cl} Upgraded performance insole & Cost \\ \hline Benefit & Buyer may pay up to 3%m \end{tabular} Additional Showroom Options