Analysis of Product Complexity considering Disruption Cost in Fast Fashion Supply Chain

Table 4

Input data for the model (all costs in US $).

Factors			Location of garment manufacturing
			Make in-house	Domestic supplier	International subsidiary	International supplier
Hourly compensation or labor cost per hour			40	40	4.28	4.28
Number of hours consumed on one occurrence of set-up			1.2	1.2	1.2	1.2
Number of workers assigned to one occurrence of set-up			8	8	8	8
Overtime allowance per hour			50%	50%	50%	50%
Number of hours consumed per one occurrence of overtime			2.5	2.5	2.5	2.5
Number of workers assigned to one occurrence of overtime			12	12	12	12
Percentage of unit production cost which is comprised of labor cost			50%	50%	25%	25%
Transportation cost for an average garment (% of unit production cost)			5%	5%	20%	20%
Transaction cost for an average garment (% of unit production cost)			2%	3%	10%	10%
Number of items in each assortment			2000	2000	2000	2000
Total cost of manufacturing (Different for each destination)			Assumed	10% higher than in-house	50% lower than in-house	10% higher than subsidiary
Percentage of assortment sold			83%–100%	83%–100%	83%–100%	83%–100%
Inventory holding cost for obsolete stock			12% of obsolete stock
Case A
Premium freight disruption cost from (i) Fabric suppliers to garment manufacturer; (ii) garment manufacturer to retailer			3000	3000	12500	12500
Premium freight disruption cost from trims and accessories suppliers to garment manufacturer			200	200	250	250
Case B
Premium freight disruption cost from (i) fabric suppliers to garment manufacturer; (ii) garment manufacturer to retailer			12500	12500	3000	3000
Premium freight disruption cost from trims and accessories suppliers to garment manufacturer			250	250	200	200
Case C
Premium freight disruption cost from (i) fabric suppliers to garment manufacturer; (ii) garment manufacturer to retailer			12500	12500	12500	12500
Premium freight disruption cost from trims and accessories suppliers to garment manufacturer			250	250	250	250
Company category	Elements of complexity	Type of cost	Predefined disruption factor without impact of assortments
Case A
Fabric suppliers	30–48	Premium freight	0.50	0.55	0.63	0.70
Trims and accessories suppliers	15–54	Premium freight	0.50	0.55	0.63	0.70
Garment manufacturing	50–84	Premium freight	0.25	0.28	0.31	0.35
		Overtime	0.25	0.28	0.31	0.35
		Set-up	0.25	0.28	0.31	0.35
Case B
Fabric suppliers	30–48	Premium freight	0.63	0.70	0.50	0.55
Trims and accessories suppliers	15–54	Premium freight	0.63	0.70	0.50	0.55
Garment manufacturing	50–84	Premium freight	0.31	0.35	0.25	0.28
		Overtime	0.31	0.35	0.25	0.28
		Set-up	0.31	0.35	0.25	0.28
Case C
Fabric suppliers	30–48	Premium freight	0.63	0.70	0.63	0.70
Trims and accessories suppliers	15–54	Premium freight	0.63	0.70	0.63	0.70
Garment manufacturing	50–84	Premium freight	0.31	0.35	0.31	0.35
		Overtime	0.31	0.35	0.31	0.35
		Set-up	0.31	0.35	0.31	0.35