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Operations Management and Management Science Case Study Capacity Planning New Balance Athletic Shoes Summary James Davis is the president and general manager of New Balance Athletic Shoes The Boston Massachusetts based company began producing corrective shoes and arch supports in 1906 New Balance garnered a reputation for quality specialty footwear when in the 1950s it began producing running shoes for men It is the beginning of 1978 and Mr Davis has a number of important decisions to make regarding the future of his growing company In recent years the demand for running shoes has experienced explosive growth The increasing popularity of the sport of running requires James Davis to carefully evaluate the accuracy of the companys sales forecast Mr Davis knows that precise forecasting is the key to providing good-quality service by meeting customer demand Another effect of increasing demand on New Balance is the necessity for expansion Mr Davis must evaluate a number of options for expanding production capacity in order to meet increased demand for his companys products This report will attempt to offer James Davis sound advice in regards to the evaluation of sales forecasts and expansion options We will also present Mr Davis with an alternate sales forecast and an evaluation of New Balances sales representative network Analysis Upon reviewing New Balances 1978-1981 domestic sales forecast it is decided that James Davis may have reason to be apprehensive Davis needs to be sure that the forecasted sales increases which range from 117 to 286 of 1977s sales are truly warranted Although Davis knows that demand for running shoes is skyrocketing he should also know that that does not guarantee sales The maturing preferences of the shoe consumer have been evident in the ever changing ratings of Runners World magazines top ten shoes Upon reviewing the lists of top ten shoes we realized that product development is not only a key to New
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