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ISyE 4301, Section A: Supply Chain Economics

Fall 2014 (19aug14)

Instructor: Chelsea C. White III, Schneider National Chair of Transportation and Logistics
Email: cwhite@isye.gatech.edu
Phone: 404-894-0235; Fax: 404-894-2301
Office Location: Groseclose 0205, Room 430
Office hours: TBD, Room 430, Groseclose
Location: IC 113
Time: 8:05-9:25 Tuesdays and Thursdays
TA: Yasaman Mohammadshahi

Catalog Description: Topics include pricing models; revenue management; gaming and
equilibrium; principal agent models; auctions; supply chain coordination strategies; and value of
information.

Prerequisites: ISyE 3133, ISyE 3232

Text: David Simchi-Levi, Philip Kaminsky, Edith Simchi-Levi, Designing and managing the
supply chain: concepts, strategies, and case studies, 3rd Edition, 2007, Irwin, McGraw-Hill,
ISBN: 978-0-07-298239-8 (edition with CD not mandatory)

Course objectives: The course objectives are to provide models, concepts, and solution methods
important in the design, control, operation, and management of supply chain systems and their
alignment with corporate strategy. Topics that will be addressed include: inventory management,
network planning, supply contracts, the value of information, supply chain integration,
distribution strategies, strategic alliances, procurement & outsourcing strategies, global logistics
& risk management, coordinated product & supply chain design, and customer value.

Outcomes and their relationships to ISyE program outcomes: At the end of this course,
students will be able to:

Understand and quantify the economics of batching and economy of scale
Understand and quantify risk pooling and reduction
Understand and quantify the economics of information and incentives in supply chain
Understand and quantify economics of supply quantity, pricing and differentiation under
different industrial organizations

Case studies: Each student will be assigned to one of 11 case study groups. Each case study
group will make a 45-minute presentation following lectures by the instructor on the associated
chapter in the text and write a 5 to 7 page report on the case study. Both presentation slides and
the report will be due one week after the case study presentation to the class. In the case study
presentation, we request that you:

Overview the assigned case study (going into depth regarding how the material in the
chapter outside of the case study is used or could be used by the company)
Update the material in the case study about the industry (the competitors) and the firm
Then engage the class to answer the questions related to the case study (these are asked at
the beginning and/or at the end of the case study).

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In the past, we have relied exclusively on the case studies in the text. However, several of these
case studies are now dated. This year, we are replacing six of the case studies with more recently
written case studies, which we think will greatly enhance the quality of the learning experience.
Each of these case studies requires a copyright permission having a charge of $3.25. The six case
studies can be found on the Darden Business School (at the University of Virginia) website. The
case studies are:

Chapter 2 Inventory management Wal-Mart China: Tian Tian Pingjia OM-1472 (2012)
Chapter 3 Network planning Kulicke and Soffa Industries, Inc.: Designing a Supply
Chain Network OM-1406 (2010)
Chapter 4 Supply contracts Epsilon Refinery Group QA-0796 (2012)
Chapter 5 Value of information Collaborative E-Commerce: Shaping the Future of
Partnerships in the Healthcare Industry M-0661 (2002)
Chapter 10 Global logistics & risk management Elektrikraft: Global Sourcing Initiative
(A) O-1484 (2012)
Chapter 11 Coordinated product & supply chain design Edison2 OM-1461 (2012).

We direct you to Darden Business Publishing: !""#$%%&"'()*+,(+)-*./(0/-/,*)+1% . You must
create an account prior to checkout, which consists of name, email address, and the name of your
institution of higher learning (hint: Georgia Tech). Once you have purchased the copyright
permissions and presented the TA with the receipts, then the TA will send you an electronic copy
of each case study.

Much of the information for the presentation and report will come from a web search in part to
inform the class what has happened to the company since the case study was written. The book
and case study should not be the only sources of the presentation and report. These presentations
should be interactive with the class. Be inquisitive. Anticipate questions that the class, TA, or
instructor will ask and either answer them during the presentation or answer them when asked
during Q&A.

The presentation and the report, which should go into more depth than the presentation, will be
graded on the basis of content (How informative and detailed, both quantitatively and
qualitatively, was the presentation and report?) and presentation (Was the presentation
interesting? Did the presentation present an update of the company?), as well as how well the
class responds during Q&A and the quality of answers to questions asked.

Each member of each group will evaluate the other group members. The instructor will evaluate
the group presentation and report. Each class member will also evaluate each presentation
(except his or her own) on the basis of (1) content and (2) presentation style and write a two
paragraph report that gives a one paragraph overview of the presentation and lists three or so
important issues brought up during the presentation (the take aways).

Each case study is associated with a chapter in the text as follows, where the asterisk refers to a
case study that is not in the text:

Chapter 2 Inventory management Wal-Mart China*
Chapter 3 Network planning Kulicke & Soffa*
Chapter 4 Supply contracts Epsilon*
Chapter 5 Value of information E-Commerce*
Chapter 6 Supply chain integration Dell, Inc
Chapter 7 Distribution strategies Amazon
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Chapter 8 Strategic alliances Kimberly-Clark
Chapter 9 Procurement & outsourcing strategies Zara & Solectron
Chapter 10 Global logistics & risk management Elektrikraft*
Chapter 11 Coordinated product & supply chain design Edison2*
Chapter 12 Customer value Made to Measure.

Grading policy

Case study report and presentation 20.0%
In class participation 10.0%
Homework & pop quizzes 20.0%
Examinations
Quiz#1 (Chapters 1-3; HW#1) 12.5%
Quiz#2 (homework from Chapters 4-7) 12.5%
Final (Chapters 1-12; all homework) 25.0%

Homework assignments and due dates

HW#1:
Covers Chapters 1-3
Distributed 26 August
Due Noon (12pm) 15 September
Returned & discussed 18 September
HW#2
Covers Chapters 4-5
Distributed 30 September
Due Noon (12pm) 9 October
Returned & discussed 16 October
HW#3
Covers Chapters 6-7
Distributed 2 October
Due Noon (12pm) 20 October
Returned & discussed 23 October
HW#4
Covers Chapters 8-9
Distributed 21 October
Due Noon (12pm) 10 November
Returned & discussed 13 November
HW#5
Covers Chapters 10-11
Distributed 6 November
Due Noon (12pm) 24 November
Returned & discussed 2 December
HW#6
Covers Chapter 12
Distributed 25 November
Due Noon (12pm) 1 December
Returned & discussed 4 December


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Schedule (30 classes; each class is 1 hour, 20 minutes)

August
19, 21: Overview, background
26, 28: Begin Chapter 1; Complete Chapter 1
September
2, 4: Begin Chapter 2; Complete Chapter 2
9, 11: Begin Chapter 3; Complete Chapter 3
16, 18: Begin Chapter 4; Complete Chapter 4
23*, 25: Begin Chapter 5; Complete Chapter 5
30: Quiz#1on 30th;
October
2: Begin Chapter 6
7, 9: Complete Chapter 6; begin Chapter 7
14, 17: Fall recess on 14
th
; complete Chapter 7
21, 23: Begin Chapter 8; Complete Chapter 8
28, 30: Quiz#2 on 28
th
; begin Chapter 9
November
4, 6: Complete Chapter 9; begin Chapter 10
11, 13: Complete Chapter 10, begin Chapter 11
18, 20: Complete Chapter 11; begin Chapter 12
25, 27: Complete Chapter 12; Thanksgiving
December
2, 4: Course review

*Special guest lecturer: Andrea Laliberte, is the Edenfield Executive in Residence in ISyE.
Ms. Laliberte will discuss the supply chain operational and strategic challenges and opportunities
for Coach, a leading marketer of modern classic American accessories, and Coachs competitive
environment. Before joining ISyE, Ms. Laliberte was a senior vice president of distribution and
consumer service for Coach, responsible for global distribution, customer service, transportation,
and customs compliance. Ms. Laliberte is an emerita member of the ISyE Advisory Board, and a
current member of the Georgia Tech Alumni Trustee Board and Georgia Tech Advisory
Board. Additionally, she was the recipient of the 2008 College of Engineering Distinguished
Alumna Award.

Final: 11dec13, 8:00am-10:50am

Rules

Student-Faculty Expectations: www.sga.gatech.edu/expectations
Georgia Tech Honor Code www.honor.gatech.edu
No makeup exams. If you cannot take a test due to official GT events or emergency, bring a
note.
All tests are closed book, closed notes. You will be given formula sheets if needed.
Working together on homework means you can clarify a confusing point, ask a question
about the question or example, text, class notes, ask where to find reference, etc. After you
get the clarification and answer, you should work out the problem by yourself, without use of
the solutions of others. Working out a homework problem together step-by-step or referring
to the solutions of others is considered cheating and can lead to a variety of consequences.
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References
Competitive Solutions: The Strategists Toolkit, by R.P. McAfee, Princeton University
Press, 2002
Dale Bellman and Chelsea White (eds), Trucking in the Age of Information, Ashgate,
2005
Suzanne Berger, How We Compete, Doubleday, 2006
Co-opetition by Adam Brandenberger and Barry Nalebuff, Currency Doubleday, 1996
Karen Butner, et al., (eds), Reshaping Supply Chain Management: Vision and Reality,
IBM Global Business Services, 2007
Sunil Chopra and Peter Meindl, Supply Chain Management: Strategy, Planning and
Operation, Prentice-Hall, 4th Edition, 2010, ISBN-10: 0136080405, ISBN-13: 978-0-13-
608040-4
Charles Fine, Clockspeed: Winning Industry Control in the Age of Temporary
Advantage, Perseus Books Publishing, 1998
HBR, Harvard Business Review on Supply Chain Management, Harvard Business School
Press, 2006
Richard Lester and Michael Piore, Innovation: The Missing Dimension, Harvard
University Press, 2004
Jeffery Liker (ed), Becoming Lean, Productivity Press, 1998
Jeffery Macher and David Mowery (eds), Innovation in Global Industries, National
Academies Press, 2008
David Mowery (ed), U.S. Industry in 2000: Studies in Competitive Performance,
National Academies Press, 1999
Harvard Business Resource: Aligning Incentives for Supply Chain Efficiency, by V.G.
Narayanan, Ananth Raman, April 10, 2000. Prod. #: 600110-PDF-ENG
Charles Poirier, Advanced Supply Chain Management, Berrett-Koehler Publishers, 1999
Michael Porter, Competitive Strategy, First Free Press, 1998
Michael Porter, Competitive Advantage, Simon & Schuster, 1998
Robert Rudzki and Robert Trent, Next Level Supply Management Excellence, J. Ross
Publishing, 2011