YO WEAR, INC

Group Members

Almas Arshad

Agha Jahanzeb Khan

Amna Touqir

YO Wears

Richard Crisler started apparel industry in 1988 from Duke University. Started its manufacturing and selling Duke Logo boxer shorts under the brand name of stone wear. Due to popularity of use of underwear Crisler decided to change company name which relates to its product line.

Then Stone wear changed with YO Wear with its trade mark Max Boxer line of clothing.

Problems

Low capacity of production Very less experience Lack of capital YO wear was losing 33% of their order due to less production Crisler was ignoring the market change

Competition was there because of outsourcing due to cheaper labor

Penetration pricing strategy was not working Higher inventory Planned to shut down the business

Marketing of YO Wear

To increase sales and overcome all the problems Crisler change introduce marketing strategy.

Traveled various trade shows throughout the united state Introduce product push strategy Attending 16 shows in a year Focus on a twice yearly Las Vegas trade show Wholesale price was $22 each to catalog companies whereas retail price was

$48 each

Mail order catalog was proffered instead of purchase order because of higher sales demand Revenue was also generated through YO Wear web site (www.maxboxxer.com)

Held out let sales events each year

To reduce inventory Crisler introduce Just In Time (make to order) strategy instead of forecasting demand

Traditional designs were also introduced

Production at YO WEAR

Yo wear was operating in 5000 square foot building.

A small section was leased for $1500 a month to help ease the monthly mortgage.
Building, Land and Equipment cost $430,000 to Crisler.

Crisler estimated his annual overhead cost to be 160,000 in addition to mortgage.

Production at YO WEAR
Items
Fabric cost Buttons cost Label cost Poly bag cost Stiffening Collar Thread & Shipping Total cost

Cost per unit

$7 $0.04 $0.08 $0.03 $0.02 $0.12 $7.29

Production at YO WEAR

Crisler used flexible workforce to vary the number of sewing-machine operators throughout the year due to three different periods of demand.

January through March was usually the slow period.

From April to July sales picked up because of the warm weather August to December saw a peak demand. During peak seasons Crisler contracted much of his work in order to meet capacity needs.

Production at YO WEAR

Crisler was giving $10 per hour as wage.

Crisler had limited stock as raw material and supplier took a week to send
fabric from New York.

Also, shipping from Yo wear to customer was paid by the customer himself.

Sourcing from Hong Kong

Crisler had recently sourcing some of its shirt from Hong Kong.
The quality of the product was as goods as the quality of the product produce in his plant.

The Chinese manufacturing labor cost was lower. Shipping expense was nominal. Minimum order was high, lead time was longer and it would take up to three

months to get his order from china.

Sourcing from Hong Kong would allow him to realize huge saving on variable cost.

Sourcing from Hong Kong

Cost per shirt
Manufactured in Hong Kong Landed duty paid above 1700 shirt $11.50 $8.88

Total cost

$20.38

Solution to Problems

Crisler should not source from Hong Kong because he get shipment of his product in three months due to which he will not able to fulfill his value proposition of short lead time and ability to response quickly.

Cause loss of order. Lose control on supplies. Many small customer preferred to buy U.S made goods.