Yo Wear, Inc.
A Charlottesville-based manufacturer of "kooky" active-wear clothing must decide whether to outsource some of its shirts to a manufacturer in Hong Kong. While providing lower costs, the supplier reduces Yo Wear's flexibility to respond to changes in demand volume. Students must determine the relevant costs of sourcing in Hong Kong and making to order in house. A newsvendor-type model is required to determine the optimal order size from Hong Kong.