Pepe jeans Essay

The company maintains contact with its sovereign retailers via group of 10 agents and each agent is responsible for retailers in a particular area of the country. Pepe is convince that a good relationship with the independent retailers is vital to its success. Pepes requirement to place firm orders half-dozen months in advance with no possibility amendments, cancellation, or repeat ordering. Some claimed that the inflexible order brass forced them to order less, resulting in stock outs.Pepe felt that a change was going to be involve soon. The easiest solution would be work with the Hong Kong sourcing agent to reduce the lead time associated with orders but this was going to profit the cost significantly. Even with the significant increase in cost, consistent delivery schedules would be difficult to keep. another(prenominal) suggestion was to build a finishing operation in United Kingdom.Pepe was interested to see how formation worked at U. S. operations. They found that they w ould have to keep about six weeks supply of basic jeans on make in the United Kingdom and they have to invest ? 1,000,000 worth of equipment. They also estimated that it would cost about ? 500,000 to scat the facility each year. They could locate the facility in the basement of current office building, and the renovations would cost ? 300,000.