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Abstract/Syllabus:
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15.764 The Theory of Operations Management, Spring 2004. (Massachusetts Institute of Technology: MIT OpenCourseWare), http://ocw.mit.edu (Accessed 10 Jul, 2010). License: Creative Commons BY-NC-SA
By focusing their operations directly on customers, some manufacturing businesses have gained competitive advantages. (Image courtesy of Ede Bittle, EDE.DESiGN.)
Course Highlights
The classes include student presentations of different research papers, which lead into group discussions. Readings are drawn from a range of classical and recent research papers.
Course Description
The doctoral seminar 15.764 focuses on theoretical work for studying operations planning and control problems. This term's special topic, "Customer-Driven Operations," considers how a number of companies have succeeded in focusing their operation systems on the customer. The class reviews the quantitative models and theoretical tools underlying some of the customer-driven operational practices of these cutting-edge companies. Students will read and present research papers on topics such as distribution systems, short life-cycle product management, and forecast evolution models.
This MIT OpenCourseWare site is dedicated to the memory of Bhuwan Singh, a member of the class.
*Some translations represent previous versions of courses.
Syllabus
Special Topic for Spring 2004 Course
Customer-Driven Operations
Objective
A number of companies are currently deriving significant competitive advantage from the customer focus of their operation systems; examples include Dell (personal computer) through its direct-to-consumer and assemble-to-order model, Zara (fashion retail) through product testing, forecasting and life-cycle management, and Amazon (e-retail) through its unique distribution system and web interface.
The purpose of this year's doctoral seminar in operations management is to review the quantitative models and theoretical tools underlying or describing some of the customer-driven operational practices of these and other cutting-edge companies. Accordingly, we will cover a wide range of both classical and very recent research papers illustrating the following topics:
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Distribution Systems
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Customer Choice Models
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Assemble-to-Order Systems
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Short Life-Cycle Product Management
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Customer Service Centers
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Forecast Evolution Models
Overall, this seminar should be a valuable opportunity to both learn about classical results and identify interesting current research opportunities.
Format
Each class will consist of a paper presentation by a student, a group discussion about the paper and its general theme, and some remarks (possibly including theoretical complements) by the professor. We will maintain throughout an informal (luncheon) setting, with the goal of stimulating an active learning environment through open discussions. For the presenting student, the class will be followed by an individual coaching/debriefing session with the professor, specifically focusing on research presentation skills. Listeners are not allowed.
Calendar
Since each class is based on the presentation and discussion of a paper, those titles are listed below. The readings page offers full bibliographic citations.
| 1 |
Organizational Session |
| Part I: Distribution Systems |
| 2 |
Eppen, Gary, and Linus Schrage. "Centralized Ordering Policies in a Multi-Warehouse System with Lead times and Random Demand." |
| 3 |
Graves, Stephen. "A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment." |
| 4 |
Roundy, Robin. "98%-Effective Integer-Ratio Lot Sizing for One-Warehouse Multi-Retailer Systems." |
| Part II: Assemble-to-Order Systems |
| 5 |
Rosling, K. "Optimal Inventory Policies for Assembly Systems Under Random Demand." |
| 6 |
Gallien, Jérémie, and Lawrence Wein. "A Simple and Effective Component Procurement Policy for Stochastic Assembly Systems." |
| 7 |
Lu, Yingdong, and Jing-Sheng Song. "Order-Based Cost Optimization in Assemble-to-Order Systems." |
| 8 |
Wang, Y., and P. Glasserman. "Lead-time Inventory Trade-offs in Assemble-to-order Systems." |
| 9 |
Plambeck, Erica, and Amy Ward. "Optimal Control of High-Volume Assemble-to-Order Systems." |
| Part III: Forecast Evolution Models |
| 10 |
Heath, D. C., and P. L. Jackson. "Modeling the Evolution of Demand Forecasts with Application to Safety Stock Analysis in Production/Distribution Systems." |
| 11 |
Graves, Stephen, D. B. Kletter and W. B. Hetzel. "A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization." |
| 12 |
Toktay, Beryl L., and Lawrence M. Wein. "Analysis of a Forecasting-Production-Inventory System with Stationary Demand." |
| Part IV: Short Life-Cycle Product Management |
| 13 |
Fisher, Marshall, and A. Raman. "Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales." |
| 14 |
Kurawarwala, A., and H. Matsuo. "Forecasting and Inventory Management of Short Life-Cycle Products." |
| 15 |
Ho, Teck-Hua, Sergei Savin, and Christian Terwiesch. "Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint." |
| 16 |
Fisher, Marshall, and Kumar Rajaram. "Accurate Retail Testing of Fashion Merchandise: Methodology and Application." |
| Part V: Customer Choice Models |
| 17 |
Mahajan, Siddharth, and Garrett van Ryzin. "Stocking Retail Assortments Under Dynamic Consumer Substitution." |
| 18 |
Bitran, Gabriel, P. Rocha e Oliveira, and A. Schilkrut. "Managing Customer Relationships Through Price and Service Quality." |
| 19 |
Talluri, Kalyan, and Garrett van Ryzin. "Revenue Management Under a General Discrete Choice Model of Consumer Behavior." |
| Part VI: Customer Service Centers |
| 20 |
Whitt, Ward. "Improving Service by Informing Customers About Anticipated Delays." |
| 21 |
Harrison, Michael J., and Assaf Zeevi. "A Method for Staffing Large Call Centers Based on Stochastic Fluid Models." |
| 22 |
Pinker, Edieal J., and Robert A. Shumsky. "The Efficiency-Quality Trade-Off of Cross-Trained Workers." |
| 23 |
Armony, Mor, and Costis Maglaras. "On Customer Contact Centers with a Call-Back Option: Customer Decisions, Routing Rules and System Design." |
| 24 |
Shumsky, Robert A., and Edieal J. Pinker. "Gatekeepers and Referrals in Services." |
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Further Reading:
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| 1 |
Organizational Session |
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| Part I: Distribution Systems |
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Survey for Part I:
Muckstadt, J.A., and R.O. Roundy. "Centralized Planning Models for Multi-Echelon Inventory Systems under Uncertainty." Chapter 3 in Handbooks in Operations Research and Management Science. Vol. 4, Logistics of Production and Inventory, edited by S. Graves, A. H. G. Rinnooy Kan, and P. Zipkin. Amsterdam: North-Holland, 1993, 59-132
Federgruen, A. "Continuous Review Policies for Multi-Level Inventory Systems with Stochastic Demand." Chapter 4 in Handbooks in Operations Research and Management Science. Vol. 4, Logistics of Production and Inventory, edited by S. Graves, A. H. G. Rinnooy Kan, and P. Zipkin. Amsterdam: North-Holland, 1993, 133-74. |
| 2 |
Eppen, Gary, and Linus Schrage. "Centralized Ordering Policies in a Multi-Warehouse System with Lead times and Random Demand." |
Eppen, Gary, and Linus Schrage. "Centralized Ordering Policies in a Multi-Warehouse System with Lead times and Random Demand." TIMS Studies in the Management Sciences. Vol. 16, Multi-Level Production/Inventory Control Systems, Theory and Practice, edited by Leroy B. Schwarz. Amsterdam: North-Holland, 1981. |
| 3 |
Graves, Stephen. "A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment." |
Graves, Stephen. "A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment." Management Science 31, no. 10 (1985). |
| 4 |
Roundy, Robin. "98%-Effective Integer-Ratio Lot Sizing for One-Warehouse Multi-Retailer Systems." |
Roundy, Robin. "98%-Effective Integer-Ratio Lot Sizing for One-Warehouse Multi-Retailer Systems." Management Science 31, no. 11 (1985): 1416-30. |
| Part II: Assemble-to-Order Systems |
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Survey for Part II:
Song, Jing-Sheng, and Paul Zipkin. "Supply Chain Operations: Assemble-to-Order Systems." Chapter 11 in Handbooks in Operations Research and Management Science. Vol. 30, Supply Chain Management, edited by T. De Kok, and S. Graves. Amsterdam: North-Holland, 2003. |
| 5 |
Rosling, K. "Optimal Inventory Policies for Assembly Systems Under Random Demand." |
Rosling, K. "Optimal Inventory Policies for Assembly Systems Under Random Demand." Operations Research 43, no. 6 (1989). |
| 6 |
Gallien, Jérémie, and Lawrence Wein. "A Simple and Effective Component Procurement Policy for Stochastic Assembly Systems." |
Gallien, Jérémie, and Lawrence Wein. "A Simple and Effective Component Procurement Policy for Stochastic Assembly Systems." Queueing Systems Theory and Applications 38, no. 2 (2001). |
| 7 |
Lu, Yingdong, and Jing-Sheng Song. "Order-Based Cost Optimization in Assemble-to-Order Systems." |
Lu, Yingdong, and Jing-Sheng Song. "Order-Based Cost Optimization in Assemble-to-Order Systems." 2003. To appear in Operations Research . |
| 8 |
Wang, Y., and P. Glasserman. "Lead-time Inventory Trade-offs in Assemble-to-order Systems." |
Wang, Y., and P. Glasserman. "Lead-time Inventory Trade-offs in Assemble-to-Order Systems." Operations Research 43, no. 6 (1998). |
| 9 |
Plambeck, Erica, and Amy Ward. "Optimal Control of High-Volume Assemble-to-Order Systems." |
Plambeck, Erica, and Amy Ward. "Optimal Control of High-Volume Assemble-to-Order Systems." Stanford, CA: Stanford University, 2003. |
| Part III: Forecast Evolution Models |
| 10 |
Heath, D. C., and P. L. Jackson. "Modeling the Evolution of Demand Forecasts with Application to Safety Stock Analysis in Production/Distribution Systems." |
Heath, D. C., and P. L. Jackson. "Modeling the Evolution of Demand Forecasts with Application to Safety Stock Analysis in Production/Distribution Systems." IIE Transactions 26, no. 3 (1994): 17-30. |
| 11 |
Graves, Stephen, D. B. Kletter and W. B. Hetzel. "A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization." |
Graves, Stephen, D. B. Kletter, and W. B. Hetzel. "A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization." Operations Research 46, supp. no. 3 (1998): S35-49. |
| 12 |
Toktay, Beryl L., and Lawrence M. Wein. "Analysis of a Forecasting-Production-Inventory System with Stationary Demand." |
Toktay, Beryl L., and Lawrence M. Wein. "Analysis of a Forecasting-Production-Inventory System with Stationary Demand." Management Science 47, no. 9 (2001): 1268-81. |
| Part IV: Short Life-Cycle Product Management |
| 13 |
Fisher, Marshall, and A. Raman. "Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales." |
Fisher, Marshall, and A. Raman. "Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales." Operations Research 44, no. 1 (1996): 87-99. |
| 14 |
Kurawarwala, A., and H. Matsuo. "Forecasting and Inventory Management of Short Life-Cycle Products." |
Kurawarwala, A., and H. Matsuo. "Forecasting and Inventory Management of Short Life-Cycle Products." Operations Research 44, no. 1 (1996): 131-50. |
| 15 |
Ho, Teck-Hua, Sergei Savin, and Christian Terwiesch. "Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint." |
Ho, Teck-Hua, Sergei Savin, and Christian Terwiesch. "Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint." Management Science 48, no. 2 (2002): 187-206. |
| 16 |
Fisher, Marshall, and Kumar Rajaram. "Accurate Retail Testing of Fashion Merchandise: Methodology and Application." |
Fisher, Marshall, and Kumar Rajaram. "Accurate Retail Testing of Fashion Merchandise: Methodology and Application." Marketing Science 19, no. 3 (2000): 266-78. |
| Part V: Customer Choice Models |
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Textbook/Survey for Part V:
Anderson, Simon, Andre de Palma, and Jacques-Francois Thisse. Discrete Choice Theory of Product Differentiation. Cambridge, MA: MIT Press, 1992. ISBN: 0-262-01128-X. |
| 17 |
Mahajan, Siddharth, and Garrett van Ryzin. "Stocking Retail Assortments Under Dynamic Consumer Substitution." |
Mahajan, Siddharth, and Garrett van Ryzin. "Stocking Retail Assortments Under Dynamic Consumer Substitution." Operations Research 49, no. 3 (2001): 334-51. |
| 18 |
Bitran, Gabriel, P. Rocha e Oliveira, and A. Schilkrut. "Managing Customer Relationships Through Price and Service Quality." |
Bitran, Gabriel, P. Rocha e Oliveira, and A. Schilkrut. "Managing Customer Relationships Through Price and Service Quality." Cambridge, MA: MIT Sloan School of Management, 2003. |
| 19 |
Talluri, Kalyan, and Garrett van Ryzin. "Revenue Management Under a General Discrete Choice Model of Consumer Behavior." |
Talluri, Kalyan, and Garrett van Ryzin. "Revenue Management Under a General Discrete Choice Model of Consumer Behavior." Barcelona, Spain: Universitat Pompeu Fabra, 2000. To appear in Management Science . |
| Part VI: Customer Service Centers |
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Survey for Part VI:
Gans, Noah, Ger Koole, and Avishai Mandelbaum. "Telephone Call Centers: A Tutorial and Literature Review." Manufacturing and Service Operations Management 5, no. 2 (2003): 79-141. |
| 20 |
Whitt, Ward. "Improving Service by Informing Customers About Anticipated Delays." |
Whitt, Ward. "Improving Service by Informing Customers About Anticipated Delays." Management Science 45, no. 2 (1999): 192-207. |
| 21 |
Harrison, Michael J., and Assaf Zeevi. "A Method for Staffing Large Call Centers Based on Stochastic Fluid Models." |
Harrison, Michael J., and Assaf Zeevi. "A Method for Staffing Large Call Centers Based on Stochastic Fluid Models." Stanford, CA: Stanford University, 2003. |
| 22 |
Pinker, Edieal J., and Robert A. Shumsky. "The Efficiency-Quality Trade-Off of Cross-Trained Workers." |
Pinker, Edieal J., and Robert A. Shumsky. "The Efficiency-Quality Trade-Off of Cross-Trained Workers." Manufacturing and Service Operations Management 2, no. 1 (2000): 32-48. |
| 23 |
Armony, Mor, and Costis Maglaras. "On Customer Contact Centers with a Call-Back Option: Customer Decisions, Routing Rules and System Design." |
Armony, Mor, and Costis Maglaras. "On Customer Contact Centers with a Call-Back Option: Customer Decisions, Routing Rules and System Design." Operations Research 52, no. 2 (2004): 271-92. |
| 24 |
Shumsky, Robert A., and Edieal J. Pinker. "Gatekeepers and Referrals in Services." |
Shumsky, Robert A., and Edieal J. Pinker. "Gatekeepers and Referrals in Services." Management Science 49, no. 7 (2003): 839-56. |
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