Indian Institute of Management Raipur

Post Graduate Programme 2013-15

Term-V

Supply Chain Modeling

Course Outline
Instructor
Santosh Kumar Prusty, Ph.D. (IIT Kharagpur)
Assistant Professor, IIM Shillong

Course Description
The course on Supply Chain Modeling
focuses on those participants who would
look forward in their carrier to be in the
Supply Chain and Logistic Management
domains
and/or

as

managers,

entrepreneurs,

consultants,
i.e.

decision

makers. The focus of the course is how to

take various decisions related to Supply
Chain

Management

and

Logistic

Management using different types of

models and modeling techniques. In the
current analytics era, rapidly dominating
the business world, huge amount of data

Courtesy: www.mit.edu

are generated every moment, which can be useful for the decision makers if they can
read, explain, and use them intelligently. The courses goal is to sensitize the
participants how models can be effectively constructed and applied to Supply Chain
Management problems for better and effective decision making process. This is neither
a purely theoretical nor a case study course, but rather an analytical course that
addresses real problems found in practice related to Supply Chain management and
how they can be tackled using various modeling techniques and models.

Course Objectives
The objectives of the Supply Chain Modeling course are:
To sensitize the participants with the various data collection, data collation, and
data analytics techniques related to Supply Chain Management.
To equip the participants with art and science of modeling skills in the context of
Supply Chain Management.
To reflect the attitude of participants to themselves in taking decisions using
various modeling techniques and models i.e. Statistical, Optimization, System
Dynamics, and other Descriptive models.
The objective of the course is NOT to theorize a Supply Chain Management context into
a general theoretical model, which is usually developed by the researchers and
PhD/FPM students.

Course Motivation and Course Map

Models are the abstractions of reality. Hence, all models are wrong. However, models
are useful. It is wrong to be the slave of the models rather to use the models for effective
decision making. Therefore, it is essential on the part of the modeler to capture the
reality and ingrain them to the models so that models will be credible. However, due to
the bounded rationality of human mind i.e. modeler, the abstraction process becomes
difficult, sometimes erroneous. The difficulty increases when the complexity attached
with the reality (that is to be modeled) increases. Hence, the model becomes too much
complex and effectiveness of its use is reduced. Too much simplification by the modeler
also leaves out many important aspects of reality resulting a vague model of no or limited
use. In such dichotomous situation, modeling becomes as an art as well as science.
Furthermore, the stake involved in the decisions to be taken with the help of model
increases as it goes up in the ladder. That means more the decision is strategic, more is
the stake involved in the organization that puts more responsibility on the modeler.
Hence, there is thin thread between the simplifications vs. precision and operational vs.
strategic levels. The risk amplifies when the time period between the decisions taken
and outcome of the decisions. Hence, the life of modeler is always tough. The syllabus
for the course is planned according to the level of complexity involved in the reality and
importance of decision problems with respect to the organization that is pictorially
illustrated below.
2

Customer Allocation
Manufacturing Strategy
Distribution Strategy

Level of Complexity
LOW
HIGH

Inventory Decisions

Capacity Allocation

Resource Utilization

Capacity Planning

Plant/Distribution
Facility Location

Distribution Mode
Product and Process Selection
Vendor Managed Inventory

Optimal Procurement Policy

Production Scheduling

Supplier Selection

Direct Delivery from Supplier

Configuration

of Distribution Facilities

Product Line Selection

LOW
HIGH
Level of Organizations Stake
Figure 1: Level of Complexity Vs Organization's Stake involved with Model

Course Outline
Sl No
1

Topic
Supply Chain
Management
Decisions

Integration of
Emerging
Information
Technology with
Supply Chain
Management for
Model Building
Optimization Models
for Supply Chain

3-4

Learning Points & Learning References

To understand the Supply Chain as a system and
identify the important decisions that are taken by
decision makers to improve the overall performance.
Reference(s):
Articles:
MIT Professor Sees Promise In Supply Chain
Modeling
Performance Measures and Performance Models
for Supply Chain Decision Making by Y Narahari
and Shantanu Biswas
How to do Strategic Supply Chain Planning.
(2003) ManMohan S Sodhi, MIT Sloan
Management Review. Vol 45, No. 1
To understand the role of Information Technology in
Supply Chain that can help in bringing Analytics for
Developing Models for Decision Making.
Reference(s):
Article: Supply Chain Analytics
Chapter 1
Chapter 2
To start understanding simple modeling methods for
various decisions using Linear Programming
3

5-6

7-8

9-10

11-12

13-14

Management: Linear
Programming
Resource Allocation
Models
Transportation
Models
Multi-objective
Optimization
Stochastic Models
Optimization Models
for Supply Chain
Management: Mixed
Integer Programming
Supplier Selection
Supply Chain
Network
Optimization
Real-life Application
of Optimization
Modeling of Supply
Chain
Unified
Optimization
Methods
Heuristic Models

Descriptive Models
for Supply Chain
Management
Decisions
Demand
Forecasting
Simulation Models
DEA Models
Supply Chain
Decision Database
Using Data for
Modeling

Reference(s):
Chapter 3

To capture the increased level of complexity in

modeling Supply Chain related decisions
Reference(s):
Chapter 4
HBS Case: DHL Supply Chain (Classroom
Hand-on Exercise)
Case: Strategic Planning at Ajax (Chapter 4,
Page: 130)
HBS Case: Supply Chain Optimization at Madurai
Aavin Milk Dairy (Classroom Hand-On Modeling
Workshop)
To understand how too much complex scenarios can
be simplified and modeled to suit to the customized
decision requirement and achieve a fair model output
without diluting the reality.
Reference(s):
Chapter 5
Case: Chemtech Vehicle Routing (Chapter 5,
Page 189)
Case: Goodstone Tire Company Production
Scheduling (Chapter 5, Page: 198)
To learn other modeling techniques and models
other than optimization models to understand and
analyze the supply chain management situations.
Reference(s):
Chapter 6

To understand how various kinds of data are stored,

retrieved, and used in modeling for various decision
making situation.
Reference(s):
Chapter 7
Case: Transfer Pricing Model for Tasty Chips
Company (Chapter 7, Page: 280)

15-16

Real-life Application
of Cost Modeling of
Supply Chain
Modeling for Supply
Chain Planning
Decisions (Strategic
and Tactical)
Resource
Acquisition and
Divestment Option

HBS
Case:
Whirlpool
Corporation
Global
Procurement
(Classroom
Hand-On
Modeling
Workshop)
To learn modeling for Strategic Supply Chain
decisions using Optimization Techniques.
Reference(s):
Chapter 8

HBS Case: Dollar Tree Logistics (Classroom Hand-On

Modeling Workshop)
17-18

Modeling for Supply

Chain Planning
Decisions
(Operational)

Reference(s):
Chapter 9
HBS Case: School Chaley Hum: Optimizing Students
Commute to KPS (Classroom Hand-On Modeling
Workshop)

19-20

Modeling for
Inventory Planning
Decisions
Modeling for Supply
Chain Decision
Making under
Uncertainty
Scenario Planning
Contingency
Planning

Reference(s):
Chapter 10
Reference(s):
Chapter 11
HBS Case: Delivering Doors in a Window: Supply
Chain Management at Hindustan Aeronautics
Ltd.

Pedagogy
The course will be mostly delivered through discussions and hand-on-modeling
activities. Every participant has to bring Laptop to the sessions and start the modeling
activity when the instructor will narrate a problem situation. There will be lectures also
by the instructor as and when required. It is expected that the participants need to
involve themselves in the hand-on-modeling exercises for enhancing their modeling skill
better. They are also required to submit assignments (building models) as and when the
instructor will float them. A successful case discussion demands intensive preparation
from both sides and rational participation in the discussions. The cases will be
distributed to you well in advance for preparation. Some of the cases are to be presented
by the participants in groups during the class hours as assignments.

Evaluation
Components
Mid-Term/Case Analysis/Presentations
Assignment Submissions
End-term exam
Total

Weight
20%
30%
50%
100%

Text Book Reference

Shapiro, Jeremy F. (2007). Modeling The Supply Chain. Cengage Learning Pub.

Case References
Product Number

Product Title

W12888-PDF-ENG

DHL Supply Chain

BH627-PDF-ENG

Supply Chain Analytics

UV1448-PDF-ENG

Dollar Tree Logistics

SMR120-PDF-ENG
IMB341-PDF-ENG

UV0341-PDF-ENG
W13196-PDF-ENG
IMB305-PDF-ENG

W11600-PDF-ENG
898238-PDF-ENG

Author(s)

Singfat Chu, David

Ringrose
Gilvan C. Souza

Timothy M. Laseter, Yu
Wu
How to do Strategic Supply Chain Manmohan S. Sodhi
Planning
Supply
Chain
Optimization
at Unnikrishnan Dinesh
Madurai Aavin Milk Dairy
Kumar; P. Arun Pandian;
Nachiappan SP
Whirlpool
Corporation
Global Timothy M. Laseter
Procurement
School Chaley Hum: Optimizing Omkarprasad S. Vaidya;
Students Commute to KPS
David Sparling; Rohit
Bhagat
Delivering Doors in a Window: Supply Unnikrishnan Dinesh
Chain Management at Hindustan Kumar; Arun Manohar;
Aeronautics Ltd.
G. N. Sripriya
DD Traders: Sourcing for DEMDACO
Peter C. Bell; Carolyn
Glasow; Julia Ho
Pioneer Hi-Bred International, Inc.: Francis J. Aguilar; Xin X
Supply Management
He; Paul Clark

Learning Objectives
1. To introduce students to the development of mathematical modeling and solution
tools for supply chain management;
2. To teach students to use these tools to analyze strategic, tactical, and operational
supply-chain decisions including facility location, vehicle routing, and inventory
management; and,
3. To engage students in case studies based on real world supply chain decisions.