Ivey Publishing

Modeling the Supply Chain

Shapiro, J.F.,2/e (United States, Duxbury, 2001)
Prepared By Sang Won Kim, Ph.D. Candidate (Production & Operations Management)
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Supply Chain Management, Integrated Planning and Models

Carol Prahinski

Product Number: 9B02D020
Publication Date: 1/10/2003
Revision Date: 11/30/2009
Length: 4 pages

Unifine Richardson is a food manufacturer with 110 employees. The company's sole supplier of honey announced that effective immediately it was no longer able to supply Chinese honey. The Canadian Food Inspection Agency had rejected the importation of Chinese honey due to recently found traces of an antibiotic chemical. China had provided 20 per cent of the world's honey supply. Faced with escalating prices, issues with customers' preferences and possible product recalls, the purchasing manager must determine the company's next step. International sourcing, supply disruptions, supply chain management and quality issues must be considered.

Teaching Note: 8B02D20 (13 pages)
Industry: Manufacturing
Issues: Imports; Quality; Supplier Relations; Purchasing
Difficulty: 4 - Undergraduate/MBA

P. Fraser Johnson, Amrou Awaysheh

Product Number: 9B02D018
Publication Date: 11/29/2002
Revision Date: 2/12/2003
Length: 4 pages

In the early 2000s, the new director of logistics at Holt Renfrew, a high-end retailer of men's and women's fashions, has been asked to prepare a detailed plan for dealing with the company's $40 million warehoused inventory and its chronic stock out problems. Given the opportunity to prove how logistics can benefit the company's profit margin, the director prepares a three-fold strategy: improve the physical layout and process flow in the distribution center, upgrade the distribution systems and business processes, and re-allocate human resources. His challenge is augmented by the need to receive merchandise from international suppliers and distribute it quickly to compete in the fast-paced fashion industry.

Teaching Note: 8B02D18 (10 pages)
Industry: Retail Trade
Issues: Logistics; Supply Chain Management; Retailing; Inventory Planning/Control
Difficulty: 4 - Undergraduate/MBA

Chapter 2:
Information Technology

John Melnyk, Darren Meister

Product Number: 9B03E002
Publication Date: 4/2/2003
Revision Date: 10/19/2009
Length: 11 pages

Yodlee is pioneering an emerging technology, account aggregation, that allows Internet users to authenticate only once to have access to personal password-protected account data from many sources. Yodlee offers this technology on a co-branded application service provider basis, primarily to financial institutions. In January 2001, the company acquired its only significant competitor VerticalOne; the combined entity has almost 100 accounts, but 25 installed clients are on the VerticalOne platform. Yodlee managers must devise a plan for integrating VerticalOne into Yodlee and migrating the installed base of VerticalOne clients to the Yodlee platform. The supplement, Yodlee Inc. - The VerticalOne Integration (B), product number 9B03E003, presents what Yodlee did.

Teaching Note: 8B03E02 (10 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Information Technology; Acquisitions; E-Business Models; Action Planning and Implementation
Difficulty: 4 - Undergraduate/MBA

Sid L. Huff, Elspeth Murray

Product Number: 9A98E012
Publication Date: 5/27/1998
Revision Date: 6/20/2000
Length: 20 pages

Metalco is a large Australian mining company. It has a rocky history in terms of its effective use of information systems (IS), and there is widespread dissatisfaction in the company concerning IS and the IS department. A recent resignation of the chief information officer led to the decentralization of the IS function, to move it closer to the operating departments. At the same time, one of the division heads has proposed that the company buy the SAP enterprise-wide system, to replace an earlier internal system which had been poorly received. The price tag for SAP is very high, $23 million. Implementing it would also require substantial changes in company processes. In light of its history, recent IS decentralization, and the high SAP price tag, the company is faced with making the decision of whether to go ahead with SAP. An appendix in the case provides extensive information on the procedure used to evaluate SAP, and results thereof.

Teaching Note: 8A98E12 (4 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Information Systems; Information Technology; Information System Design; Computer System Implementation
Difficulty: 4 - Undergraduate/MBA

Chapter 3:
Fundamentals of Optimization Models: Linear Programming

Peter C. Bell, Drew Parker

Product Number: 9A98E034
Publication Date: 8/23/1999
Revision Date: 1/28/2010
Length: 4 pages

Jeff Smith, formulation analyst for New England Feed Supply Inc., was evaluating the following week's requirements for three animal feed mixes produced by the Burlington plant. A shortage of one ingredient, meat meal, meant that the company would find it difficult to meet the orders on hand. Smith needed to determine which, if any, of the mixture formulae should be altered, and in what way; alternately, he could elect to buy additional meat meal on the spot market, at a significantly higher price. (A Microsoft Excel model is available for use with this case, product 7A98E034.)

Teaching Note: 8A98E34 (5 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: Linear Programming; Resource Allocation; Spread Sheet Application; Computer Applications
Difficulty: 4 - Undergraduate/MBA

Peter C. Bell, James Van Brenk

Product Number: 9B03E010
Publication Date: 5/28/2003
Revision Date: 10/19/2009
Length: 4 pages

Vytec Corporation is a subsidiary of Owens Corning, and manufactures extruded vinyl residential siding. In order to maximize the quantity and quality of the product, the operations analyst had to decide how best to use the available silos and extruder. He must determine the best way to configure the extruders to their respective material silos in order to ensure that each silo faced a similar demand for material. An Excel spreadsheet containing data and solver solutions is available (product 5B03E10).

Teaching Note: 8B03E10 (5 pages)
Industry: Manufacturing
Issues: Linear Programming; Spread Sheet Application; Operations Analysis; Resource Allocation
Difficulty: 4 - Undergraduate/MBA

Chapter 4:
Fundamentals of Optimization Models: Mixed Integer Programming

Chris K. Anderson, Benjamin Marcus

Product Number: 9B03E001
Publication Date: 2/27/2003
Revision Date: 10/19/2009
Length: 4 pages

Craggier National Park is a typical game reserve located in South Africa. The game reserve's management is trying to determine the optimal mix of animal species to stock a game reserve. Jointly they are trying to determine the mix of hunting packages to promote to potential clients.

Teaching Note: 8B03E01 (7 pages)
Industry: Accommodation & Food Services
Issues: Integer Programming; Optimization; Revenue Management
Difficulty: 5 - MBA/Postgraduate

Peter C. Bell, James Van Brenk

Product Number: 9B03E013
Publication Date: 5/28/2003
Revision Date: 10/19/2009
Length: 4 pages

Vytec Corporation is a subsidiary of Owens Corning and is a leading manufacturer of vinyl siding. The operations analyst wanted to determine if there was a more efficient way to organize the company's warehouse. After finding some high demand products being stored a long distance from the shipping dock, his first reaction was to move the product closer to the shipping area, reducing the time and distance required to retrieve the product for shipping. Doing so, however, would displace another product that should also be near the docks. Further research into the problem revealed many other issues. Two files are available - the case data file, product 7B03E013 and the solver model 5B03E13.

Teaching Note: 8B03E13 (13 pages)
Industry: Manufacturing
Issues: Resource Allocation; Linear Programming; Spread Sheet Application; Operations Analysis
Difficulty: 4 - Undergraduate/MBA

Chapter 5:
Unified Optimization Methodology for Operational Planning Problems

Ken R. Bowlby, John S. Haywood-Farmer

Product Number: 9A94D014
Publication Date: 9/8/1994
Revision Date: 2/23/2010
Length: 4 pages

The assistant plant manager was trying to decide on production scheduling and inventory management policies for the new computer diskette plant. Students are presented with three demand forecasts of increasing complexity as variability between and within product lines emerges. The case is suitable for students to do an economic order quantity (EOQ) analysis and draft a production schedule.

Teaching Note: 8A94D14 (6 pages)
Industry: Manufacturing
Issues: Production Scheduling; Inventory Planning/Control; Forecasting; Economic Order Quantity
Difficulty: 4 - Undergraduate/MBA

Larry Menor, Ken Mark

Product Number: 9B01D004
Publication Date: 2/2/2001
Revision Date: 12/17/2009
Length: 19 pages

Blinds To Go (BTG), a Montreal-headquartered producer of made-to-order window coverings, had made the decision to enter the Florida market by opening eight retail stores. As a result of this decision, the senior vice-president (SVP) of operations for BTG was faced with the dilemma of deciding if and when an assembly plant should be built to support these and future Florida retail stores. The most recent plant, built in Lakewood, New Jersey, had experienced operational problems during its startup, resulting in the eventual replacement of most of the supervisory staff and a significant portion of the plant employees. This led to additional start-up costs and customer service problems. Faced with this expansion into Florida, the SVP set about devising an operating plan that would achieve the goals of the Florida expansion without the growing pains of past efforts. As the stores were to be opened in six months, a plan would have to be finalized soon.

Teaching Note: 8B01D04 (14 pages)
Industry: Manufacturing
Issues: Service Operations; Operations Management; Action Planning and Implementation; System Design
Difficulty: 4 - Undergraduate/MBA

Chapter 6:
Supply Chain Decision Databases

Peter C. Bell, Matt Brudzynski

Product Number: 9A98E023
Publication Date: 2/16/2000
Revision Date: 1/22/2010
Length: 6 pages

The marketing services manager at Babcock and Wilcox had determined that: Despite being quite sophisticated in our analysis, we are not quite getting the information we need for our shop-load planning and scheduling. Our sales projections also drive our accounting and business forecasts, so we need to improve the way we develop our basic forecasts. How can Babcock and Wilcox improve its forecasting? (A Microsoft Excel data file is available for use with this case, product 7A98E023.)

Teaching Note: 8A98E23 (6 pages)
Industry: Construction
Issues: Risk Analysis; Spread Sheet Application; Simulation; Forecasting
Difficulty: 4 - Undergraduate/MBA

Lyn Purdy, Joseph Schiele

Product Number: 9A98C020
Publication Date: 10/27/1999
Revision Date: 1/25/2010
Length: 15 pages

The assembly supervisor at Navistar faces a critical supply problem; one that not only affects the bottom line but more importantly the customer. This case requires a student to determine what is and is not important, to think creatively about how to use the information provided, and to formulate a recommendation with respect to solving the current supply problem. The student must review: (1) a process flow chart in detail, (2) numerical data with respect to costs and frequency of specific causes for trim shortages, and (3) a number of identified causes for the supply problem. Navistar must look at value added activities, its internal policies and practices, storage of materials, a Just-In-Time inventory system that may be too tight, and communication difficulties that arise when last minute design changes occur.

Teaching Note: 8A98C20 (8 pages)
Industry: Manufacturing
Issues: Automotive; Supplier Relations
Difficulty: 4 - Undergraduate/MBA

Chapter 7:
Strategic and Tactical Supply Chain Planning State-of-the-Art Modeling Application

P. Fraser Johnson

Product Number: 9B01D014
Publication Date: 3/28/2002
Length: 4 pages

With revenues of over US$1 billion, UPS Logistics Group was a wholly owned subsidiary of United Parcel Service, which offered a full range of supply chain services in North America, Europe, Asia and Latin America. UPS Logistics was responsible for distribution in Eastern Canada for the Canadian Pharmaceutical Distribution Network, an association of pharmaceutical manufacturers that jointly distribute products to hospital pharmacies. Members of this association are unhappy with the current performance of the supply chain, and have asked UPS Logistics' general manager for operations to establish a set of key performance indicators for the network's distribution operations. The general manager must determine how the logistics would be measured before setting specific improvement targets.

Teaching Note: 8B01D14 (14 pages)
Industry: Health Care Services
Issues: Performance Measurement; Outsourcing; Logistics; Distribution
Difficulty: 4 - Undergraduate/MBA

P. Fraser Johnson, Robert Klassen, Manish Kumar

Product Number: 9B03D012
Publication Date: 11/28/2003
Revision Date: 3/16/2005
Length: 23 pages

In March 2002, the general manager of Mathura Refinery had to respond to new national legislation that mandated the production of new cleaner-burning fuels. While these fuels would reduce vehicular emissions in the country, there was the possibility of increased local emissions from the refinery from the new processes used to produce these fuels. Effluent and oily sludge emissions also demanded management attention. The general manager recognized that Mathura Refinery had unique constraints because of it close proximity to the Taj Mahal. Any future expansion of the refinery's capacity would be contingent on its ability to reduce sulfur dioxide emissions and address public expectations.

Teaching Note: 8B03D12 (11 pages)
Industry: Manufacturing
Issues: Environment; Pollution; Manufacturing Strategy; Government Regulation
Difficulty: 4 - Undergraduate/MBA

Chapter 8:
Strategic and Tactical Supply Chain Planning: Advanced Modeling Application

John Kamauff, Sara Allan

Product Number: 9A95D021
Publication Date: 5/13/1996
Revision Date: 10/23/2008
Length: 18 pages

This case demonstrates how forming strategic partnerships with suppliers and clients can lead to win-win-win situations in the supply chain. It can be used to discuss the importance of information sharing and the use of information technology to drive the direction of the individual relationships. It also shows how cultivating partnerships can result in a competitive advantage in a highly competitive service industry. Techniques for developing and maintaining such a relationship are also brought out in the case, and it provides an opportunity to focus on the key concepts of supply chain management as they apply to service industries.

Teaching Note: 8A95D21 (3 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Customer Relations; Management in a Global Environment; Supplier Relations; Supplier Selection
Difficulty: 4 - Undergraduate/MBA

Terry H. Deutscher, Dana Gruber

Product Number: 9B02A023
Publication Date: 12/9/2002
Revision Date: 10/28/2009
Length: 14 pages

Global Healthcare Exchange Canada is a business-to-business exchange that connects hospitals and their major suppliers through an electronic procurement process. Founded as a subsidiary of its global parent, the exchange has become the leading health-care exchange in the country, but it is still far short of break-even. It must develop a compelling value proposition if it is going to drive adoption among hospitals and suppliers to the target levels. To do so, it must overcome considerable inertia among hospitals that are often very reluctant to change from frequently inefficient purchasing processes. Although there are major benefits to be realized from automating supply chain operations in the industry, the adoption decision process among hospitals is highly complex, but very idiosyncratic. In confronting these challenges, the exchange must also re-examine its own business model, in particular its pricing strategy for both suppliers and hospitals.

Teaching Note: 8B02A23 (15 pages)
Industry: Health Care Services
Issues: E-Business; Market Strategy; Purchasing; Marketing Planning
Difficulty: 4 - Undergraduate/MBA

Chapter 9:
Integration of Financial and Physical Supply Chain

Robert W. White, Chris Lane, Will Matthews

Product Number: 9A96B015
Publication Date: 5/14/1996
Revision Date: 2/5/2010
Length: 15 pages

The executive vice-president finance and MIS of P.A. Bergner & Co. (Bergner), a large mid-western U.S.-based department store retailer, received word that Bank One had pulled its $32.1 million letter of credit. Buoyed by the successful acquisition of Boston Stores, Bergner acquired Carson, Pirie Scott & Co. The downturn in the economy coupled with excessive debt levels has precipitated a crisis. The focus of the case is on formulating a restructuring plan, including alternatives under bankruptcy legislation. The analysis requires the determination of Bergner's viability, optimal capital structure, value and reorganization plan. (A Microsoft Excel spreadsheet is available for use with this case, product 7A96B015.)

Teaching Note: 8A96B15 (222 KB)
Industry: Retail Trade
Issues: Valuation; Financial Strategy; Corporate Planning; Bankruptcy
Difficulty: 4 - Undergraduate/MBA

Michiel R. Leenders, James A. Erskine, John R. Phillips

Product Number: 9B02D012
Publication Date: 7/22/2002
Revision Date: 11/9/2009
Length: 3 pages

A manufacturer of construction parts spends $150,000 annually on courier services. When the courier threatens to stop shipments because the required $10,000 deposit has not been maintained, one of the company's owners decided to switch couriers. The new courier is late in delivering a vital component, nearly causing a production shutdown. The materials manager wants to recommend that the company return to the previous courier service. He needs to consider that the owner is a principled person, who favored the new courier. As well, the company has had layoffs and pay cuts. Although he had been a long-term employee and is satisfied with his work, the manager needs to determine whether he should approach the issue at the next management meeting or simply allow the situation to be the sole responsibility of the owner.

Teaching Note: 8B02D12 (2 pages)
Industry: Transportation and Warehousing
Issues: Job Satisfaction; Customer Relations; Financial Planning; Operations Management
Difficulty: 4 - Undergraduate/MBA

Chapter 10:
Operational Supply Chain Planning

John S. Haywood-Farmer, Amanda Clark

Product Number: 9A94D018
Publication Date: 9/2/1994
Revision Date: 2/23/2010
Length: 5 pages

The plant manager of Hammond Manufacturing's Guelph, Ontario transformer plant was concerned about problems with the delivery of enclosures from a sister plant ten kilometres away. These problems reduced the company's ability to compete for business by delaying production and shipments to customers. Both plant managers wanted to reduce not only the frequency of late deliveries, stockouts, and backorders, but also the level of frustration between their two plants. Students have to identify the source of these problems and propose a reasonable course of action to deal with them.

Teaching Note: 8A94D18 (4 pages)
Industry: Manufacturing
Issues: Materials Management; Supplier Relations; Inventory Planning/Control; Manufacturing Strategy
Difficulty: 4 - Undergraduate/MBA

Michiel R. Leenders, James A. Erskine, John S. Haywood-Farmer

Product Number: 9A94D011
Publication Date: 3/23/1994
Revision Date: 2/23/2010
Length: 6 pages

This case is intended to be used in conjunction with Rebar Steel Limited - Background Information, which gives common background information for each of the four cases: Rebar Steel Limited (A), Rebar Steel Limited (B), Rebar Steel Limited (C), and Rebar Steel Limited (D). Six months after starting up the rolling mill, now that he has dealt with a number of problems associated with start up, in the (D) case, the plant manager is trying to decide how to schedule runs of different sizes of rebar product. Students have to consider various scheduling trade-offs and create a set of scheduling rules for the six sizes of finished products.

Industry: Manufacturing
Issues: Bottlenecks; Production Scheduling; Process Analysis; Inventory Planning/Control
Difficulty: 4 - Undergraduate/MBA

Chapter 11:
Inventory Management

P. Fraser Johnson

Product Number: 9A98D013
Publication Date: 8/18/1998
Revision Date: 11/8/2002
Length: 13 pages

Inventories exist in virtually every organization, and can serve any number of purposes. However, they can also represent a significant investment. Consequently, an important challenge facing managers is balancing the economic benefits of less frequent orders or setups versus the costs of holding inventory. This note provides an introduction to managing independent demand inventory items. It reviews the basic techniques associated with independent demand items, including fixed order quantity and fixed time period systems, and the ABC inventory classification system. The note is intended to address the questions of how much to order (the lot size issue) and when to order (the reorder point issue).

Issues: Inventory; Logistics; Operations Management; Inventory Planning/Control
Difficulty: 4 - Undergraduate/MBA

Edward D. Arnheiter, John J. Cocco

Product Number: 9B02D019
Publication Date: 1/9/2003
Revision Date: 11/30/2009
Length: 33 pages

Loctite Corporation is a large industrial adhesives company. The company has implemented the five principles of lean management on its customer service operation. A recent merger of the customer engineering service operation with the dispensing equipment operation has the vice-president of technical service and application engineering looking at applying the lean principles on the equipment operations. The company initially considered equipment a secondary product line needed only to augment its service offering in the support of the core product, industrial adhesives. In addition, most of Loctite's equipment manufacturing activities were outsourced so suppliers played a key role in lean transformation. The vice-president must prepare a plan to implement the principles of lean management while meeting the goals set out by the president of the company.

Teaching Note: 8B02D19 (17 pages)
Industry: Manufacturing
Issues: Manufacturing Strategy; Inventory Planning/Control; Value Chain; Price Tension
Difficulty: 5 - MBA/Postgraduate

Chapter 12:
Organizational Adaptation to Optimization Modeling Systems

Joseph J. DiStefano, Donna Everatt

Product Number: 9A99C001
Publication Date: 3/31/1999
Revision Date: 1/14/2010
Length: 15 pages

AWARD WINNING CASE - This case was one of the winning cases in the 1999 Regional Asia-Pacific Case Writing Competition. The regional HR manager of a multinational conglomerate that operates in over 100 countries had to make decisions regarding the evacuation of its senior management from a politically unstable country. In particular, the firm's expatriate and ethnic Chinese managers and their families faced considerable risk. The HR manager is charged with executing corporate policies and plans. Some of the challenges to consider relate to the development and initial execution of the evacuation plan. These challenges are heightened by a decentralized decision-making process entrenched in the firm's structure and culture, as well inconsistent information from numerous sources in the field operations. Moreover, the issue of which employees to evacuate poses a moral dilemma for the decision-maker. Specifically, he must decide what criteria - rank, ethnicity, tenure - should dictate whether an employee and/or his or her family is offered assistance, and of what sort.

Teaching Note: 8A99C01 (6 pages)
Industry: Manufacturing
Issues: Organizational Structure; Crisis Management; Corporate Responsibility; Corporate Culture
Difficulty: 4 - Undergraduate/MBA

Rod E. White, Douglas Reid

Product Number: 9A97M002
Publication Date: 2/10/1997
Revision Date: 2/4/2010
Length: 13 pages

R-M Trust is a firm engaged principally in the transfer and registration of shares on behalf of its clients, which are publicly-traded Canadian companies. Due to technological advances, intensified competition based on price, a new entrant, and shifting customer preferences, R-M's transfer agent revenue has declined by 50% in just one year. The CEO, is faced with deciding how to redeploy R-M's core competencies into other areas, given that the precarious financial and business situation of the firm leave him with no alternative but to act. This case focuses on how the CEO goes about assessing R-M's core competencies, identifying opportunities for redeployment, and making a decision. A follow-up case (9A97M003) is available.

Teaching Note: 8A97M02 (6 pages)
Industry: Finance and Insurance
Issues: Organizational Change; Competitive Advantage; Strategy and Resources; Decision Analysis
Difficulty: 4 - Undergraduate/MBA