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 Supply Chain Planning (SMA 6305)  posted by  duggu   on 1/2/2008  Add Courseware to favorites Add To Favorites  
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Simchi-Levi, David, and Stephen Graves, 15.762J Supply Chain Planning (SMA 6305), Spring 2005. (Massachusetts Institute of Technology: MIT OpenCourseWare), (Accessed 08 Jul, 2010). License: Creative Commons BY-NC-SA

Internal supply chain.

An internal supply chain layout. (Image by Prof. Stephen C. Graves.)

Course Highlights

This course contains lecture notes from several speakers as well as a detailed reading list.

Course Description

15.762J focuses on effective supply chain strategies for companies that operate globally with emphasis on how to plan and integrate supply chain components into a coordinated system. Students are exposed to concepts and models important in supply chain planning with emphasis on key tradeoffs and phenomena. The course introduces and utilizes key tactics such as risk pooling and inventory placement, integrated planning and collaboration, and information sharing. Lectures, computer exercises, and case discussions introduce various models and methods for supply chain analysis and optimization. The class is recommended for Operations Management concentrators and is a first half-term subject.

This course was also taught as part of the Singapore-MIT Alliance (SMA) programme as course number SMA 6305 (Manufacturing Systems II: System Design and Optimisation).

Technical Requirements

Microsoft® Excel software is recommended for viewing the .xls files found on this course site. Free Microsoft® Excel viewer software can also be used to view the .xls files.



Course Outline and Assignments

This class will be a mix of lectures, case discussions and applications. The course objectives are to develop modeling skills and to provide new concepts and problem-solving tools, applicable to the design and planning of supply chains.

Course requirements are to come to class prepared, and to participate in the class. There will be a number of group assignments throughout the class. The grading will depend on the assignments and contribution to the class.

We recommend the following book, and will suggest complementary readings throughout the class, as well as use some of its cases and computer exercises:

Simchi-Levi, David, Philip Kaminsky, and Edith Simchi-Levi. Designing and Managing the Supply Chain. 2nd ed. New York, NY: McGraw-Hill, 2003. ISBN: 0071410317. (SKS)

We also recommend and suggest the following books as useful references or complements:

Hopp, Wallace and Mark Spearman. Factory Physics. 2nd ed. Boston, MA: Irwin, 2000. ISBN: 0256247951. (HS)

Nahmias, Steven. Production and Operations Analysis. 4th ed. Boston, MA: Irwin, 2000. ISBN: 0072417412. (N)

Chopra, Sunil and Peter Meindl. Supply Chain Management. 2nd ed. Upper Saddle River, NJ: Prentice Hall, 2004. ISBN: 013101028X. (CM)

Shapiro, Jeremy. Modeling the Supply Chain. Pacific Grove, CA: Duxbury, 2001. ISBN: 0534373631. (S)

Silver, Edward, David Pyke, and Rein Peterson. Inventory Management and Production Planning and Scheduling. 3rd ed. New York, NY: Wiley, 1998. ISBN: 0471119474. (SPP)

As a supplement to the class we have arranged for a few guest speakers for a public seminar series on supply chain planning. We expect to hold these seminars about once every two or three weeks.

Course Requirements

The written assignments are to be done by groups. Each group must have at least three and no more than four students. Each group needs to stay together for the term.

Case Assignments

  • Steel Works due in session 3
  • Instron due in session 7
  • Hewlett Packard due in session 10
  • HC Starck due in session 14
  • Barilla due in session 15

Each group must submit four written assignments of its choosing: each assignment should be no more than 4 typed pages, no smaller than Times, 12 point; 2-3 pages should be sufficient for most assignments.

In addition there are two problem sets:

  • Inventory problem set due in session 6
  • Strategic Inventory Placement (SIP) Model assignment due in session 13


  • Each of the written group assignments is graded on a twenty-point scale.
  • Each problem set is graded on a ten-point scale.
  • In addition, students are encouraged to participate in class. Individual students can earn up to three points from their participation. We will judge class participation based on the quality of answers given to posed questions, contributions to a discussion of case material, and questions raised by the student.
  • Letter grades will be awarded as follows: A for 93 or more points; A- for 90-92.9; B+ for 87-89.9; B for 83-86.9; B- for 80-82.9; C+ for 77-79.9; C for 73-76.9; C- for 70-72.9. Lower scores will be graded on a case by case basis.

Academic Honesty

The rules of the MIT Faculty state: "The attempt of any student to present as his or her own the work of another, or any work which he or she has not honestly performed, or to pass any examination by improper means, is regarded by the Faculty as a most serious offense, and renders the offender liable to immediate expulsion. The aiding and abetting of a student in any dishonesty is likewise held to be a great breach of discipline."

In the context of this class, we expect you to work in groups; but groups should work independently and should not consult with each other about a particular assignment. Also, several of the cases have been used in prior years. We regard as inappropriate any substantive consultation with students from prior years about a particular assignment. We also regard as inappropriate any use of notes or videos from prior years.

If you are uncertain about any aspect or instance of this policy, please ask one of the instructors for clarification.


1 Introduction and Course Overview Prepare Case: Meditech (pp. 14-21 in SKS)

Case illustrates supply chain challenges for new product introduction.
2 Inventory Models

This class will review basic inventory theory: periodic review order-up-to policy; continuous review reorder point policy
Inventory problem set assigned
3 Inventory Systems Prepare Case: Steel Works

Case permits an application of inventory models and principles.
4 Supply Chain Tactical Planning

Guest Speaker: Mike Watson, Logic Tools
5 Supply Contracts I

These classes will introduce various types of supply chain contracts and examine how these mechanisms work, and in particular, how they help to accomplish supply chain coordination.
6 Supply Contracts II Inventory problem set due
7 Inventory Systems (cont.)

Guest Speaker: Dan Wheeler, LFM 2000
Prepare case: Instron

Case requires application of inventory, capacity and queuing tools to perform supply chain analysis.

Preparation questions are in the assignments section.
8 Multi-echelon Inventory Systems

Introduction to challenges, issues and relevant models (e.g., Eppen Schrage) for multi-echelon inventory systems
9 Supply Chain and Postponement Prepare Case: Reebok

This is a new case for which we wish to work out the bugs in an optional session.
10 Supply Chain and Product Design Prepare Case: HP Network Printer Design for Universality (pp. 230-235 in SKS)

Case illustrates challenges in global supply chain and product design. 
11 Supply Chain Integration - Controlling the Bullwhip

This class will discuss the bullwhip phenomenon, sources for it, ways of characterizing it, and then some remedies.
12 Supply Chain and Safety Stock Placement

Guest Speaker - Barrett Crane, HP, LFM '96.
Barrett will speak about application of supply chain models to improve and optimize HP supply chains. In preparation you will have a computer exercise that utilizes a student-version of a tool used at HP; the purpose of the exercise will be to develop intuition for optimal placement of inventories in a supply chain.
SIP Model assignment due
13 Supply Chain and Safety Stock Placement Prepare Case: H.C. Starck, Inc.

Case permits application of inventory principles to metal rolling process.

Preparation questions are in the assignments section.
14 Strategic Alliances and Outsourcing Prepare Case: Barilla
15 Supply Chain Integration - Application of RFID

Wrap Up, Course Summary and Feedback for Continuous Improvement

Prepare Case: Raytheon

Case examines the business case for using RFID technology for Raytheon.   Tell A Friend