Logistics And Supply Chain Management
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Course Description
This course surveys operations research models and techniques developed for a variety of
problems arising in logistical planning of multi-echelon systems. There is a focus on planning
models for production/inventory/distribution strategies in general multi-echelon multi-item
systems. Topics include vehicle routing problems, dynamic lot sizing inventory models,
stochastic and deterministic multi-echelon inventory systems, the bullwhip effect, pricing
models, and integration problems arising in supply chain management. Probability and linear
programming experience required.Show less
Course Info
INSTRUCTOR

Prof. David Simchi-Levi
DEPARTMENTS


Engineering Systems Division
Civil and Environmental Engineering
TOPICS


Business
o Operations Management
o Supply Chain Management
Engineering
LEARNING RESOURCE TYPES
assignmentProblem Sets
notesLecture Notes
Syllabus
Course Meeting Times
Lectures: 2 sessions / week, 1.5 hours / session
Prerequisites
A course in probability.
Grading
The assignments and projects account for 100% of the final grade.
Course Textbook
Simchi-Levi, David, Xin Chen, and Julien Bramel. The Logic of Logistics: Theory,
Algorithms, and Applications for Logistics and Supply Chain Management. 2nd ed. New
York, NY: Springer, 2004. ISBN: 9780387221991.
Additional References
Lemm, Jeffery M. Handbook in Operations Research and Management Science. Vol. 4,
Logistics of Production and Inventory. Edited by S. C. Graves, A. H. G. Rinnooy Kan, and P.
H. Zipkin. Amsterdam, Netherlands: North Holland Publishing, 1993. ISBN:
9780444874726.
Graves, S. C., and A. G. De Kok, eds. Handbook in Operations Research and Management
Science. Vol. 11, Supply Chain Management. Amsterdam, Netherlands: Elsevier Publishing
Company, 2003. ISBN: 9780444513281.
Simchi-Levi, David, S. David Wu, and Zuo-Jun Shen, eds. Handbook of Quantitative Supply
Chain Analysis: Modeling in the E-Business Era. New York, NY: Springer, 2004. ISBN:
9781402079528.
Calendar
SES #
TOPICS
1
Introduction and overview
Single-warehouse, single-product deterministic inventory models: Constant
2
demand, infinite horizon
Single-warehouse, single-product deterministic inventory models: Constant
3
demand, finite horizon
4-5
Single-warehouse, multi-product inventory model
6-8
Single-warehouse, multi-retailer models
9
Guest lecture
10-11 Time-varying demand
12
Stochastic inventory models: Newsvendor models
13-14 Supply contracts
KEY DATES
Assignment 1 due (Ses
#4)
Assignment 2 due (Ses
#7)
Assignment 3 due (Ses
#10)
SES #
TOPICS
15-16 Stochastic inventory models: Multi-period, finite horizon
17-18 Pricing models
19
Guest lecture
20-21 The bullwhip effect
22
23
24
25
KEY DATES
Case study due (Ses
#16)
Assignment 4 due (Ses
#17)
Assignment 5 due (Ses
#20)
Guest lecture
Green logistics
Vendor-managed inventory
Project presentations
Readings
Course Textbook
Simchi-Levi, David, Xin Chen, and Julien Bramel. The Logic of Logistics: Theory,
Algorithms, and Applications for Logistics and Supply Chain Management. 2nd ed. New
York, NY: Springer, 2004. ISBN: 9780387221991.
SES #
TOPICS
1
Introduction and overview
Single-warehouse, single-product deterministic inventory models: Constant demand,
2
infinite horizon
Single-warehouse, single-product deterministic inventory models: Constant demand,
3
finite horizon
4-5 Single-warehouse, multi-product inventory model
6-8 Single-warehouse, multi-retailer models
9
Guest lecture
10-11 Time-varying demand
12
Stochastic inventory models: Newsvendor models
13-14 Supply contracts
15-16 Stochastic inventory models: Multi-period, finite horizon
17-18 Pricing models
19
Guest lecture
20-21 The bullwhip effect
22
Guest lecture
23
Green logistics
24
Vendor-managed inventory
25
Project presentations
READINGS
Chapter 1
Chapter
6.1.1
Chapter
6.1.2
Chapter 6.2
Chapter 6.3
Chapter 7
Chapter 11.1
Chapter 11.2
Lecture Notes
Introduction to Supply Chain Management (PDF)
Inventory and EOQ Models (PDF)
Issues in Supply Chain Strategy (PDF) (Courtesy of Don Rosenfield. Used with permission.)
Logistics and Distribution Systems: Dynamic Economic Lot Sizing Model (PDF)
Introduction to Stochastic Inventory Models and Supply Contracts (PDF)
Newsboy Model with Pricing (PDF)
Analysis of Inventory Models with Limited Demand Information (PDF)
Assignments
Textbook questions are from:
Simchi-Levi, David, Xin Chen, and Julien Bramel. The Logic of Logistics: Theory,
Algorithms, and Applications for Logistics and Supply Chain Management. 2nd ed. New
York, NY: Springer, 2004. ISBN: 9780387221991.
Homework
Assignment 1
Answer textbook questions 6.2 and 6.6 and additional homework questions A-1 and A-2.
Assignment 2
Answer additional homework questions A-3 and A-4.
Assignment 3
Answer textbook questions 6.1, 6.5, and 6.7.
Assignment 4
Answer textbook questions 8.4, 8.5, 8.7 and 8.8.
Assignment 5
Answer textbook questions 10.2, 10.3, and 10.5.
Case Study
Power-of-Two (PDF)
Additional Homework Questions
A-1) A London based company purchases two raw materials from the same supplier. There is
a fixed cost of $2.50 associated with each replenishment order, independent of how many
items are involved. The purchasing agent feels that because of relatively high cost, he will
always include both items in an order. That is, the item replenishments are coordinated. The
characteristics of the items are as follows: The demand for item 1 is 2000 units per year and
the inventory holding cost is $0.20 per unit per year. Similarly, demand for item 2 is 1000
units per year and the inventory holding cost is $0.08 per unit per year.
Under the coordinated control, let T be the time in years between replenishments. Find the
best value of T and the order quantity for each item. Assume shortage is not allowed.
A-2) In the classical EOQ model assumes that when we order Q units, we receive our order in
two parts. The first part arrives immediately and contains αQ (0 < α ≤ 1) and the second part
arrives T units of time after the first part and contains the rest of the order ((1−α)Q). If
shortage is not allowed what is the optimal order quantity, Q?
A-3) Prove that the worst-case bound for heuristic developed in class for the singlewarehouse multi-item model is tight. That is, construct an example for which the cost of the
heuristic is twice the cost of the optimal solution.
A-4) Consider a multi-item model with n products, each of which with
parameters, Di, Ki and hi. Let αi be the space taken by one unit of product i. The company
needs to lease space and ϒ is the annual leasing cost. The objective is minimize the long run
average inventory carrying and ordering cost plus a leasing cost proportional to the space
needed for the warehouse. Develop a heuristic and analyze its worst-case performance.