Study Questions For all analyses, assume that the margin associated with internal production is 30 percent (of cost) per style and the average cost of overstocking is 10 percent. Thus, a shirt that retails for RE. 1,300 has a cost of Rs. 1,000, a margin of Rs. 300, and a cost of overstocking of Rs. 100. For all analysis, use the seasonal demand (for the six-month season) shown in Exhibit 7. 1. What are some challenges in the Indian market that make it difficult to establish and succeed with a chain of retail stores? Given the challenges, how do you think Wills Lifestyle is positioned? 2. Comment on the changes the LRBD made to increase responsiveness within its supply chain Which changes do you think were the most significant? What do you think of the LRBD's decision to focus on manufacturing as the initial area for improvement? Should the company have targeted single-piece flow? 3. First consider the case in which LRBD sources from a third party (as was the case prior to 2003). The third party has a unit cost that is Rs. 30 per style lower than the costs implied in Exhibit 7. The manufacturer requires advance commitment (i.e., a single order for the season) and a minimum lot size of 2,000 units. What are the performance metrics that LRBD should focus on when judging performance of the third party? How much could LRBD benefit if the third party reduced the minimum order size but maintained the requirement of a single advance order for the season? 4. What are the metrics that LRBD hoped to improve by bringing production in-house to a more flexible and responsive facility? 5. Consider the revised process implemented by LRBD since 2003. The LRBD divides the sales season into six periods and arranges for multiple replenishments after bringing in an mitial order quantity. Assume that each order cycle averages about one-sixth of the season's demand. What quantity of each style should LRBD ask for in the initial order (and successive replenishment orders) if the minimum order quantity is 2,000? How is the optimal ordering policy affected as the minimum order quantity drops from 2,000 to 300, in increments of 500? Do you think that LRBD should make an effort to reduce minimum order quantities below 500? 6. What do you think of a policy of starting the season with at least 40 percent of the forecast quantity for each style? Having a larger initial run lowers the cost of production per unit of the initial lot by Rs. 20. 7. How should the LRBD structure its sourcing strategy? What are appropriate metrics to judge the sourcing strategy? Can these metrics be used to align the different functions that are part of the supply chain? 8. What are the threats and opportunities for the LRBD as the Indian apparel retailing sector is opened to foreign competition? What role can the capabilities that the LRBD has developed play in global apparel supply chains