BSG Player Guide14
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 - ANSWERS-
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. - ANSWERS-
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. - ANSWERS-
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). - ANSWERS-
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. - ANSWERS-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. - ANSWERS-
, online sales to individuals are projected to grow from 5% to 15% of total branded sales in each
geographic region by Year 20. - ANSWERS-
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). - ANSWERS-
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. -
ANSWERS-
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. -
ANSWERS-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. - ANSWERS-
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. - ANSWERS-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 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 - ANSWERS-
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. - ANSWERS-
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. - ANSWERS-
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). - ANSWERS-
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. - ANSWERS-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. - ANSWERS-
, online sales to individuals are projected to grow from 5% to 15% of total branded sales in each
geographic region by Year 20. - ANSWERS-
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). - ANSWERS-
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. -
ANSWERS-
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. -
ANSWERS-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. - ANSWERS-
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. - ANSWERS-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%
