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    Timbuk2 Case

    Uploaded by

    Kabir Roshann
    Timbuk2 sells through several channels including domestic, international, e-commerce, and corporate sales. The e-commerce channel, which allows customers to customize bags online, is the most profitable. Manufacturing a bag in San Francisco costs $27.71 while producing in China costs $19.06 without shipping or $33.06 with air shipping to the US. Timbuk2 should consider manufacturing in China to reduce costs but would face challenges utilizing their San Francisco factory and managing inventory with overseas production.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Timbuk2 Case

    Uploaded by

    Kabir Roshann
    323 views10 pages
    Timbuk2 sells through several channels including domestic, international, e-commerce, and corporate sales. The e-commerce channel, which allows customers to customize bags online, is the most profitable. Manufacturing a bag in San Francisco costs $27.71 while producing in China costs $19.06 without shipping or $33.06 with air shipping to the US. Timbuk2 should consider manufacturing in China to reduce costs but would face challenges utilizing their San Francisco factory and managing inventory with overseas production.

    Original Title

    Timbuk2-Case

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    Timbuk2 sells through several channels including domestic, international, e-commerce, and corporate sales. The e-commerce channel, which allows customers to customize bags online, is the most profitable. Manufacturing a bag in San Francisco costs $27.71 while producing in China costs $19.06 without shipping or $33.06 with air shipping to the US. Timbuk2 should consider manufacturing in China to reduce costs but would face challenges utilizing their San Francisco factory and managing inventory with overseas production.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    323 views10 pages

    Timbuk2 Case

    Uploaded by

    Kabir Roshann
    Timbuk2 sells through several channels including domestic, international, e-commerce, and corporate sales. The e-commerce channel, which allows customers to customize bags online, is the most profitable. Manufacturing a bag in San Francisco costs $27.71 while producing in China costs $19.06 without shipping or $33.06 with air shipping to the US. Timbuk2 should consider manufacturing in China to reduce costs but would face challenges utilizing their San Francisco factory and managing inventory with overseas production.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 10

    Questions

    1)

    What channels does Timbuk2 sell through and which one is the most profitable? What are some of

    2)

    How should Timbuk2 go about deciding which options to offer customers in the e-commerce channe

    3)

    Estimate the cost of manufacturing a bag in San Francisco and the cost of producing a bag in China

    4)

    Should Timbuk2 pursue the option of manufacturing in China? If so, what challenges are they likely

    ofitable? What are some of the pros and cons of Timbuk2s Build your own channel (i.e., its e-commerce channel)?

    s in the e-commerce channel? In other words, what general principles or analysis could be used to deepen their understanding
    of producing a bag in China.

    at challenges are they likely to face and what changes will they need to make? In particular, think about the utilization of the San

    merce channel)?

    deepen their understanding of the appropriate choices? You may want to consider several of the options mentioned (an added

    out the utilization of the San Francisco factory before and after outsourcing as well as about inventory needs.

    tions mentioned (an added handle, different color logos, different size panels, etc.)

    What channels does Timbuk2 sell through and which one is the most profitable? What are some of

    According to Table 1, Timbuk2 sells through Domestic, International, eCommerce, Corporat


    Some Pros and Cons of Timbuk2's eCommerce channel

    Pros
    Customers can pick and choose from 12 or 16 different colors
    Customers
    have
    a standard
    logo
    stiched screen
    on for free
    a custom colored
    one forc
    see the bagcan
    they
    wereeither
    configuring
    on the
    computer
    and or
    experiment
    with different
    and options.
    Bags Ordered via their eCommerce channel are given a higher priority than bags in other c

    Cons
    More Labor is required to fill orders for eCommerce along side traditional channels.
    More Material is required because of the customized bags that the eCommerce channel sel

    ofitable? What are some of the pros and cons of Timbuk2s Build your own channel (i.e., its e-commerce channel)?

    al, eCommerce, Corporate and Other. eCommerce has the most sales and revenue and is the most profitable.

    a
    custom colored
    one forcolors
    an additional $15.
    periment
    with different

    ority than bags in other channels.

    itional channels.
    eCommerce channel sells.

    merce channel)?

    s the most profitable.

    Estimate the cost of manufacturing a bag in San Francisco and the cost of producing a bag in Ch

    The total cost to manufacture a bag in San Fransisco is $27.71.


    The Total cost to produce a bag in China is "

    Costs
    Workers wage per bag
    Manufacturing overheads
    Materials
    Expenses
    Shipment to San Francisco
    Shipping and handling to customer
    Total cost

    the cost of producing a bag in China.

    China (Air
    San Francisco China Shipping)
    $
    7.29 $ 0.94 $
    0.94
    $
    2.92 $ 0.38 $
    0.38
    $
    13.00 $ 13.00 $
    13.00
    $
    1.50 $ 0.75 $
    0.75
    $
    $ 1.00 $
    15.00
    $
    3.00 $ 3.00 $
    3.00
    $
    27.71 $19.06 $ 33.06

    San Francisco China


    Revenue
    $
    45.00
    ###
    Hourly Wage
    $
    12.50 $ 1.25
    Direct Labor Content
    35 mins 45 mins
    Manufacturing Overhead
    40%
    40%
    Materials
    $
    13.00
    ###
    Other Manufacturing Expenses
    $
    1.50 $ 0.75
    Shipment to San Francisco
    $
    $ 1.00
    Shipment from San Francisco to customers $
    3.00
    ###

    China (Air
    shipping)
    $
    45.00
    $
    1.25
    45 mins
    40%
    $
    13.00
    $
    0.75
    $
    15.00
    $
    3.00

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