1. Image source: New York Public Library Digital Collections
Process Analysis,
the Reorder
Points, and
Expansion at
Parlor Skis
This article introduces a small and newborn skis
producer in Boston, called Parlor Skis, and the skis
industry. It contains a process analysis for Parlor Skis, as
well as the ROP analysis, and an exploration of high
growth market in China. After the ROP analysis, this
paper introduces a new concept, called “Dynamic ROP”,
which I believe is a good fit given the predictable and
seasonal changes in skis industry.
Prepared by Yan Meng
Under supervision of David Correll, PHD
Operation Management 4006
Clark University
Worcester, MA
July 25, 2016

2. Executive Summary
This paper discusses three recommendations for Parlor Skis, including: (1)
reducing wait time; (2) using a Dynamic ROP model; and (3) expanding to potential
markets in China. These analyses are based on an interview at Parlor Skis and
communication via several emails.
At the beginning, according to the process map provided by Parlor Skis, this
paper searched for some potential methods to increase the efficiency of the producing
process. After that, the paper discuss the Reorder Point of Parlor Skis. The traditional
ROP has a positive linear relationship with demand and replenishment time. However,
according to my observation of skis sales during a year, I notice that the sales shape is
regular and wavelike. To better accommodate this seasonality, I create a new model
called “Dynamic ROP”, which is based on trigonometric functions. The maximum
ROP value in the busy season and the minimum ROP value in the slack season are
variable in the Dynamic ROP.
Finally, this paper discuss other opportunities in a highly growth market in China.
If Parlor Skis would like to extend the business to China or other Asian countries far
away, some strategies might be considered..

3. Contents
Industry Background .................................................................................................... 3
Parlor Skis .................................................................................................................... 4
Suggestion 1: Improve Efficiency by Reducing Wait Time ......................................... 4
Process overview ...................................................................................................... 4
Bottleneck & Process Issues ..................................................................................... 5
Process Refining ....................................................................................................... 6
Suggestion 2: Use a Dynamic ROP Model ................................................................... 7
ROP Analysis ........................................................................................................... 7
Current Inventory: ROP System ............................................................................... 8
Proposed Inventory ROP System: The Dynamic ROP ............................................. 9
Suggestion 3: Expanding Market to China: Produce in US or China ......................... 11
Future Opportunities ............................................................................................... 11
The R&U Framework ............................................................................................. 12
Produce in US, Sell in China .................................................................................. 13
Conclusions ................................................................................................................ 14
References .................................................................................................................. 15
Appendix A ................................................................................................................ 16

4. Industry Background
Skiing is considered as one of the most popular winter sports today, which can be
generally divided into Alpine skiing, Nordic skiing, and free-style skiing. With the
development of new materials and new design, ski technology has made significant
progress since 1990s. In the past, skis were only designed and developed for racing, so
most of the skis were slalom skis and giant slalom skis. Nowadays, skis tend to cater to
the needs of amateurs and non-professional skiers, some of whom would like to ski on
groomed trail with gentle slope, while others prefer the steep mountain areas. Modern
skis are quite diverse in functions, which might be embodied in different hardness,
dimensions, width, length, flexibility, and graphics of the skis.
However the global ski industry is struggling due to the current global economy
and the seasonality issue. In some areas, the open season for a ski area is less than
half the year, and it is getting even shorter now because of the global warming. The
growth rate of demand in the global ski industry is very low in most part of the world.
However, China has been a rare area with astonishing growing rate in the past fifteen
years, no doubt spurred by China’s rapid economic development [3].
Some of the famous ski manufactories have been running business over fifty years
and they have their own unique technologies and supply chains. These include Salomon
(founded in 1947), Head (founded in 1950), Rossignol (founded in 1907), and some
other producers. However, today I would like to introduce a small and new skis brand
which focuses on the personalized and customized skis.

5. Parlor Skis
Parlor Skis is a new skis manufacturer founded in recent years and located in the
city of Boston. It is defined as a “ski tailor” because it can make customized skis based
on four basic model types, which are Cardinal, Sparrow, Heron, and Kingfisher. It
contains four customizable features: (1) weight of skis; (2) length of skis; (3) flexibility
which can be modified by different materials or thickness of the core; and (4) custom
graphics [1].
The major customers of Parlor Skis are intermediate or professional skiers, while
a few of them are beginners or Olympic skiers. Parlor’s high-quality customized skis
cost around $1000 with options for custom graphics for an added fee. It will take about
three weeks from making an order to getting the new skis. It is noteworthy that Parlor
Skis does not have finished product in its inventory, and instead it only has inventory
for wood core and other materials.
Suggestion 1: Improve Efficiency by Reducing Wait Time
Process overview
Appendix A shows Parlor Skis production process from receiving an order to
shipping the product. In step one, Parlor communicates with customers and makes the
design before beginning the manufacturing process. Time is often variable in the first
step, because it depends on interaction with the customer.
The manufacturing process occurs from step 2 to step 7. When adding all the times
needed together in these steps, I can calculate that the total time in manufacturing
process is roughly about 11 hours, which means that this process can be finished within

6. about one and a half workdays.
After step 7, the finished skis have to be cooled down outside for one day. Then
they can be packaged and shipped to customers. Empirically speaking, the estimated
delivery time is about two to four workdays. Hence, if the materials are on hand, the
whole processing time to make one pair of skis is usually less than two weeks.
Generally speaking, Parlor Skis promises to deliver customers’skis within three weeks,
which allows for some safety time in case of any unexpected affairs.
Bottleneck & Process Issues
In order to refine the process, the first step is to do a bottleneck analysis. According
to the process map, it is not hard to find out that the sixth sub-process (Layup, Prep,
and Press) is the bottleneck, because it has the lowest capacity and longest activity time.
However, when observing these sub-processes in detail, we will find that the total
time of each process consists of two types of time, one is the labor time, the other is the
waiting time. If we pay attention to the two types of time, we will discover something
tricky: Sometimes two sub-processes can happen simultaneously. For example, after
the worker completes the work for core and sidewalls in 24 minutes of the second sub-
process, he may start making base and edges at once and leave the core and sidewalls
aside for drying. Hence, two sub-processes may be partly overlapping. But this
phenomenon does not happen at every nearby sub-processes. The worker has to wait
for three more hours after the layup process for pressing and cooling before he waxes
and stamps the new skis.

7. 0 50 100 150 200 250 300 350 400 450
Core and sidewalls Labor time: 24 mins
Wait time: 30- 45 mins
Base and edges Labor time: 29mins
Wait time: 25-30mins
Press prep and core profile Labor time: 51mins
Change tools time: 26mins
Edges, tip, and tail Labor time: 13mins
Change tools time: 15mins
Layup, prep, and press Labor time: 70mins
Wait time: 2 hours in press & 1 hour cooling
Finishing work Labor time: 56mins
Change tools time: 10mins & Dry time: 2 hours
CUMULATIVE TIME (MINUTES)
PRODUCING PROCESS
Figure 1: Suggested Time Sequence for Maufacturing
Process
Time
Suggested
Overlap 1
In order to better analyze the bottleneck and refine the process, I rewrite the
manufacturing process by separating detailed time in each sub-process in time sequence,
because it is clear to reflect which specific step the bottleneck of the process.
Process Refining
As figure 1 shows, the waiting time for after layup has longest activity time, so this
step is the bottleneck of the manufacturing process. After finding the bottleneck, let’s
have a look at how to refine the whole process from the perspective of operations
management, assuming that the performance of machines and the ability of workers are
constant.
- Refine the bottleneck: The wait time of in layup process actually contains two hours
pressing time and one hour cool time. Although we can’t technically reduce the time
Suggested
Day Break
Dry Break
Suggested
Overlap 2

8. in for pressing and cooling, we can move the cooling process out of the work hours.
We can arrange the layup process as the last process of each day. After two-hour
pressing, we settle down the skis in the workshop and finish daily work. The pressed
skis will be cooled during the night without occupying the time of working process.
- Overlapping sub-processes: As the figure 1 shows, there are two overlaps
happening in the proposed production process. The worker can start to make base
and edges while the core and sidewalls are drying, because they do not have
interaction with each other. Similarly, the worker can plane the core profile when
the base and edges are drying. As a result, by refining the wait time in these two
sub-processes, approximately one hour can be saved in the whole production
process.
After refining the operation process, the work hours for the manufacturing process
are reduced from 11 hours to about 9 hours. The key is that we begin next sub-process
during the drying time of the previous sub-process, and that we remove the cooling time
in layout process out from the working hours. Then we refine the operating process and
increase efficiency.
Suggestion 2: Use a Dynamic ROP Model
ROPAnalysis
The Reorder Point (ROP) is the signal of when to re-order to avoid stocking out. A
company needs to replenish that particular inventory stock at the Reorder Point. If both
demand and lead time are constant, the Reorder Point can be indicated as:

9. LTxd=ROP
_
, where d
_
is the average demand and LT is the lead time. Usually, a
Safety Stock is added in the ROP equation to adjust some fluctuation. So the ROP model
can also be written as: LTσdσzLTdSSLTdROP 2
d
22
LT ++´=+´= .[5]
Current Inventory: ROP System
Although the Parlor Skis does not have end-product inventory due to its customized
service, it does have plenty of raw materials inventory, including the wood core, steel
edges, fiberglass and so on. It is very important to find the Reorder Point, because it
can indicate when to place the replenishment orders for raw materials. During the
interview in Parlor Skis, I was told that last year there were about 10 orders per week
on average in December, which is the busiest time of the whole year. The lead time for
materials replenishment from the suppliers are about 3 – 6 days, determined by different
suppliers. Conservatively estimating, one week time is a quite safe number. The ROP
= 10 * 1 = 10 units. When the materials could be just enough for 10 more units of new
skis, the producer has to replenish the material inventory.
Because Parlor Skis is a relatively new company, the demand may increase in the
following years. Monitoring changes in demand is very important for Parlor Skis in the
future. When visiting this manufacturer on April 5, 2016, I am glad to see that Parlor
Skis have a good mechanism to monitor the changing of demand and the material
inventory. A notebook with the inventory of every material is place in the workshop.
The workers take records in the notebook with the date after they use any materials.
Mark Wallace, the co-founder of Parlor Skis, does the quality management of the whole

10. process.
Proposed Inventory ROP System: The Dynamic ROP
However, because of seasonal demand changes, the sales in the ski industry swing
every year. Sometimes, the difference is more than ten times between the busy season
and the slack season. Skis producers cannot ignore this factor.
Figure 2: Sales of downhill skiing from 2012 to 2013
According to an investigate research in 2014 by Terapeak.com, figure 2 shows the
seasonal selling cycle for downhill skiing [2]. In this chart, the data shows both the total
sales and the sell-through rate for downhill skiing. It is not hard to estimate that the
whole skis industry including Parlor Skis also follow the similar seasonal trends.
These big seasonal changes in demand will also greatly influence the ROP model,
Parlor Skis could use the traditional ROP value in the busiest months of the whole year,
because then demand is at its maximum in the busiest time. In other words, the ROP

11. value in busiest season indicates the safest replenishment line in the whole year.
However, the sales difference between the busy season and the off season is huge,
sometimes approximately ten times differences from the peak to the bottom. When the
company grows bigger and bigger, the ROP value may deviate even more.
I believe that the traditional ROP model is not appropriate for skis industry, because
it is so seasonal. According to the formula of ROP, if the lead time remains constant,
the ROP has a positive linear relationship with the demand. According to my
investigation in figure 3, ski sales actually has a something more like a cosine
relationship with the time throughout the year (cosine is one type of trigonometric
function). The period of the wave is 12 months. I propose a new “Dynamic ROP”
equation that reflects the relationship between the changes of ROP value and time. This
new equation can be approximately indicated as:
Dynamic ROP =
𝑃𝑒𝑎𝑘 𝑅𝑂𝑃 − 𝐵𝑜𝑡𝑡𝑜𝑚 𝑅𝑂𝑃
2
∙ cos
𝜋
6
𝑡 +
𝑃𝑒𝑎𝑘 𝑅𝑂𝑃 + 𝐵𝑜𝑡𝑡𝑜𝑚 𝑅𝑂𝑃
2
In this equation, t refers the time period in the unit of month; Peak ROP is the traditional
ROP value in the busiest time, and bottom ROP is the traditional ROP value in the
slackest time.
Take Parlor Skis as an example of this new model. The Peak ROP is 10 units, which
we have calculated before. Assuming that there are 2 orders per week on average in the
slack season, and the bottom ROP is 2 units. The dynamic ROP equation for Parlor Skis
is: Dynamic ROP = 4 cos 0.52t + 6. Figure 3 shows the output from Excel about the
dynamic ROP of Parlor Skis over 13 months. Although I can’t guarantee that this chart
is one hundred percent accurate, I believe that it is representative and could be a better

12. fit the whole skiing industry, including Parlor Skis than traditional ROP models.
Figure 3 Output of Dynamic ROP model for Parlor Skis
Suggestion 3: Expanding Market to China: Produce in US or China
Future Opportunities
In the struggling circumstance of global ski industry [3], China has been a rare area
with astonishing growth rate in the past fifteen years. According to figures from the
China Ski Association, there were an estimated 10,000 skiers in China in 1996. By the
end of 2010, the estimate was 5 million, and the China Ski Association estimates that
number has since doubled [3]. The growth of the Chinese ski industry will bring great
opportunity to every skis manufacturer in the world. Moreover, it is really attractive to
Parlor Skis because of their customized service and reasonable price. If Parlor Skis
0.000
2.000
4.000
6.000
8.000
10.000
12.000
1 2 3 4 5 6 7 8 9 10 11 12 13
Dynamic ROP
Month
Dynamic ROP for Parlor Skis
Dynamic ROP (units)
Month 0 1 2 3 4 5 6 7 8 9 10 11 12
Dynamic
ROP
(units)
10.000 9.471 8.025 6.043 4.050 2.572 2.001 2.487 3.901 5.870 7.874 9.382 9.996

13. prepares to extend their business to China in the future, what is the best strategy for
them: producing in Boston and then shipping to China, or outsourcing production to
China?
The R&U Framework
In the Randall and Ulrich (“R&U”) framework costs are divided into two types,
production costs and market mediation costs. The “production cost” include the
incremental fixed investments associated with providing additional product variants,
such as direct materials, labor, manufacturing overhead, and process technology
investments. The “market mediation costs” include the variety-related inventory
holding costs and costs of lost sales occurring when demand exceeds supply. It will
arise due to uncertainty in product demand [4].
The demand in skis industry is quite predictable with large amount of historical
data and known seasonal changes. Also, a customized skis manufacture, like Parlor Skis,
doesn’t have high inventory holding costs because all the inventory are raw materials,
not end-products. Accordingly market mediation costs would be low for Parlor Skis.
Conversely, because of the customized service, the production cost may be variety.
Hence, according to the R&U’s famous framework, keeping the company in US is
accessible because of low market mediation cost.
A production facility in China would face the opposite situation (high market
mediation costs), because more time would be required to replenish the raw materials
in China. Most of the skis raw materials are supplied from US and Europe, and higher

14. lead time will make the company more vulnerable from the uncertainty in product
demand. In addition, a Chinese local factory will face a growth market which is harder
to predict the demand.
Figure 4: Degree of Scale in Production [4]
Produce in US, Sell in China
At first, Parlor Skis could begin to extend its business to China without outsourcing
or opening a new factory in China. Currently, few skiers in China know this brand.
Parlor Skis could broadcast their services on skis forum or magazines, and open an on-
line service platform for making orders and inquiring. After gaining reputations among
Chinese skiers, Parlor Skis could choose a local factory in China to meet the underlying
rapid growth demand in China. I do not believe that opening a factory in China too

15. early is a good strategy from the R&U perspective.
Conclusions
Parlor Skis is an exciting company that excels at customized production. This
bottleneck analysis can help to refine the process, and ROP can help to improve
inventory management. I also believe that an improved ROP model could be useful.
The new Dynamic ROP model that I proposed could be a better fit for the ski industry.
Parlor Skis provides a customized service with reasonable price to bring more fun for
the ordinary skiers. I appreciate this idea and culture, and hope to see Parlor skis in
China one day.

16. References
[1] Paquet, Nelson. “Ever dream of building your own skis? Parlor Skis makes it easy
and affordable.” PowderCam, December 4, 2015 [Online]. Available:
https://www.powdercam.com/articles/custom-skis-parlor-skis
[2] Hsiao, Aron. “Terapeak Trends: Tracking the Winter Goods Seasonal Cycle”
Terapeak.com, March 17, 2014 [Online]. Available:
http://www.terapeak.com/blog/2014/03/17/terapeak-trends-tracking-the-winter-goods-
seasonal-cycle/
[3] Canadian Tourism Commission, Tourism British Columbia, and Alberta Tourism.
“2012 China Ski Study” Harrisdecima, April 2012. [Print]
[4] Taylor Randall, Karl Ulrich, (2001) Product Variety, Supply Chain Structure, and
Firm Performance: Analysis of the U.S. Bicycle Industry. Management Science
47(12):1588-1604. http://dx.doi.org/10.1287/mnsc.47.12.1588.10237
[5] Cachon, G., Terwiesch, C. (2013). Matching Supply with Demand: An Introduction
to Operations Management. New York, NY: McGraw-Hill

17. Appendix A
Process map of Parlor Skis
1. Design
-Work w/customer on
graphic and ski specs.
- Send graphic to printer.
Labor time: TBD by
customer process
Wait time: 1-4 days for
graphic turnaround
2. Make core and sidewalls
- Screw and cut core board
- Measure and trim length of
sidewalls
- Glue sidewalls to core
board
Labor time: 24mins
Wait time: 30-45mins to dry
Total time: 54 – 69mins
3. Base and edges
- Cut base using template
- Bend and trim metal edges
- Glue edges to base
Labor time: 29mins
Wait time: 25-30mins to dry
Total time: 54 – 59mins
4. Press prep and core
profile
- Plane cores
-Change/align shims,
cassettes
-Check alignment of
everything
Labor time: 51mins
Change tools time: 26mins
Total time: 77mins
5. Make edges, tip, and tail
-Rabbit edges and check
thickness with caliper
- Cut tail block from mold
- Cut fill tips
- Flame tips and tails
-Mark and bend bases, edges
Labor time: 13
Change tools time: 15mins
Total time: 28mins
6. Layup, Prep, and Press
-Check alignments
- Mix epoxy
- Put in press
Labor time: 70mins
Wait time: 2 hours in press
1 hour cooling
Total time: 3 hours 70mins
7. Finishing work
- Split skis and let cool over
night
-Stamp, varnish, wax, and
mount
Labor time: 56mins
Change tools time: 10mins
Dry time: 2 hours to dry
Total time: 3 hours 6mins
8. Packaging and Shipping
Labor time: 8mins
Wait time: TBD by distance