Ivey Publishing

Introduction to Management Science with Spreadsheets

Stevenson, W.J., Ozgur C. (United States, McGraw-Hill Irwin, 2007)
Prepared By Jing Chen, Ph.D. Candidate (Management Science)
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Introduction to Management Science, Modeling, and Excel Spreadsheets

BENCHMARKING AT ULJANIK SHIPYARD
David M. Currie, Giorgio Sinkovic

Product Number: 9B05D011
Publication Date: 4/26/2005
Revision Date: 9/28/2009
Length: 5 pages

A junior executive is given the task of calculating a benchmark common in the ship building industry - cost per compensated gross ton. Although raw data is available for its components, the executive must formulate relationships between the data to determine the benchmark. The case is designed to provide: 1) an introduction to the construction and use of benchmarks in quality management; 2) practice in conceptualizing a problem and designing a basic spreadsheet model to solve the problem. The modeling procedure uses an influence diagram as the basis for constructing the spreadsheet model, this spreadsheet model is available, product 7B05D011.

Teaching Note: 8B05D11 (9 pages)
Industry: Transportation and Warehousing
Issues: Quality Management; Spread Sheet Application; Models
Difficulty: 4 - Undergraduate/MBA



HOOKER GROUP LIQUIDATION
Peter C. Bell

Product Number: 9B00E004
Publication Date: 5/9/2000
Revision Date: 1/8/2010
Length: 6 pages

The Hooker Group, a major Australian property developer, is in liquidation owing a significant amount to external creditors. The administrator of the liquidation of the 27 companies in the Hooker Group must decide how to share the available assets of these 27 companies among the creditors. The situation is complicated by the fact that the 27 companies have all signed a deed of cross-guarantee under which they accept all responsibility for the liabilities of all companies in the group. (A Microsoft Excel model is available for use with this case, product 7B00E004.)

Teaching Note: 8B00E04 (10 pages)
Industry: Real Estate and Rental and Leasing
Issues: Bankruptcy; Forensic Accounting; Linear Programming; Spread Sheet Application
Difficulty: 4 - Undergraduate/MBA


Chapter 2:
Forecasting

BABCOCK AND WILCOX: CONSOLIDATED FORECASTING
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



NORTHERN NAPA VALLEY WINERY, INC
Peter C. Bell

Product Number: 9A98E046
Publication Date: 4/30/1999
Revision Date: 12/31/2015
Length: 3 pages

The CEO of Northern Napa Valley Winery must forecast aggregate sales of red table wine for the product year, as well as month-by-month sales for the same period. This case provides the student with the opportunity to try to forecast a time series characterized by distinct trend and seasonality with almost nine years of monthly data available. (A Microsoft Excel data file is available for use with this case, product 7A98E046.)

Teaching Note: 8A98E46 (8 pages)
Industry: Manufacturing
Issues: Data Analysis; Statistical Analysis; Regression Analysis; Forecasting
Difficulty: 4 - Undergraduate/MBA


Chapter 3:
Linear Programming :Basic Concepts and Graphical Solution

MARS INCORPORATED: ONLINE PROCUREMENT
Peter C. Bell

Product Number: 9B05E004
Publication Date: 1/31/2005
Revision Date: 9/28/2009
Length: 5 pages

Mars Inc., one of the world's largest privately owned businesses, purchased over $4 billion of materials annually, and was aware that many major firms were achieving savings of around five per cent through the use of online procurement auctions. The vice-president for Business Solutions at Mars wondered whether an online auction could be designed that would meet the special needs of the Mars company while enabling Mars to achieve the savings necessary to allow the company to prosper and grow in its highly competitive markets.

Teaching Note: 8B05E04 (7 pages)
Industry: Manufacturing
Issues: Supplier Relations; Purchasing; E-Commerce; Linear Programming
Difficulty: 4 - Undergraduate/MBA



ACUSHNET CANADA INC.: THE BONDED WAREHOUSE INITIATIVE
Gregory S. Zaric, Ian Friedman

Product Number: 9B05E012
Publication Date: 9/22/2005
Revision Date: 9/30/2009
Length: 3 pages

Acushnet Canada Inc. is considering using Canada Customs Bonded Warehouses to store golf shoes, gloves, outerwear and club heads inventory purchased from overseas suppliers. ACI often has to procure inventory four to six months before they needs it in order to ensure they will be able to meet customer requirements during the busy season. The critical managerial issue is considering the tradeoff between the cash flow savings (through duty postponement) and the need to meet the demand schedule, while taking into account storage limitations imposed by the private facility and their storage costs. This case can be used as an introduction to linear programming as well as an introduction to the concept of bonded warehouses.

Teaching Note: 8B05E12 (5 pages)
Industry: Wholesale Trade
Issues: Inventory Planning/Control; Linear Programming; Spread Sheet Application; Procurement
Difficulty: 4 - Undergraduate/MBA


Chapter 4:
Application and Solutions of Linear Programming

MARS INCORPORATED: ONLINE PROCUREMENT
Peter C. Bell

Product Number: 9B05E004
Publication Date: 1/31/2005
Revision Date: 9/28/2009
Length: 5 pages

Mars Inc., one of the world's largest privately owned businesses, purchased over $4 billion of materials annually, and was aware that many major firms were achieving savings of around five per cent through the use of online procurement auctions. The vice-president for Business Solutions at Mars wondered whether an online auction could be designed that would meet the special needs of the Mars company while enabling Mars to achieve the savings necessary to allow the company to prosper and grow in its highly competitive markets.

Teaching Note: 8B05E04 (7 pages)
Industry: Manufacturing
Issues: Supplier Relations; Purchasing; E-Commerce; Linear Programming
Difficulty: 4 - Undergraduate/MBA



BUSINESS INTELLIGENCE STRATEGY AT CANADIAN TIRE
Nicole R.D. Haggerty, Darren Meister

Product Number: 9B03E019
Publication Date: 11/5/2003
Revision Date: 10/19/2009
Length: 13 pages

Canadian Tire Corporation consists of five main business groups: a large retail chain providing automotive parts, sports and leisure and home products; a financial division; a petroleum division; a specialty automotive parts division; and a retailer of casual and work wear clothing. The information technology group is faced with developing an implementation plan for the development of a business intelligence infrastructure and business capability at Canadian Tire Retail. Concurrent to this initiative is the development and implementation of an information technology strategy for Canadian Tire Corporation, which places a number of programs on the priority list, with business intelligence seen as a high priority item for which the organization can score some quick win business success.

Teaching Note: 8B03E19 (6 pages)
Industry: Retail Trade
Issues: Information Systems; Business Intelligence; Knowledge Based Systems; Information System Design
Difficulty: 4 - Undergraduate/MBA


Chapter 5:
Linear Programming : Sensitivity Analysis and Duality

NEILSON CADBURY: HEDGING THE POTENTIAL EFFECTS OF THE QUEBEC REFERENDUM
John S. Hulland

Product Number: 9A99E029
Publication Date: 6/21/2002
Revision Date: 1/15/2010
Length: 8 pages

Neilson Cadbury is a leading chocolate confectionery, dairy and ice cream products manufacturer. As the vote date approaches for the Quebec referendum on whether Quebec will separate from the rest of Canada, Neilson's vice-president of finance and administration must determine what effect the Quebec referendum vote will have on the company. He realizes that the company's exposure to foreign currency fluctuations was not fully hedged, and he must review several alternatives that could be used to reduce the company's risks.

Teaching Note: 8A99E29 (7 pages)
Industry: Manufacturing
Issues: Risk Management; Hedging; Decision Analysis; Sensitivity Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 6:
Transportation, Transshipment, and Assignment Problems

GROCERY GATEWAY: CUSTOMER DELIVERY OPERATIONS
P. Fraser Johnson

Product Number: 9B02D003
Publication Date: 3/28/2002
Revision Date: 1/17/2006
Length: 7 pages

As Canada's largest direct online grocer, Grocery Gateway provided home delivery to approximately 125,000 customers in the Greater Toronto area, which covered a territory of approximately 3,200 square kilometres. Grocery Gateway's management staff was concerned that the company had been met only 67 per cent of its target of making four deliveries per hour. Consequently, the vice-president of industrial engineering and operations had been asked to make some recommendations aimed at improving delivery operations. These recommendations would be presented at Grocery Gateway's next weekly management meeting. There are a number of options that were worth considering. The vice-president's job was to pinpoint those options and assess how each one might affect the company's existing operation. The final choice would have to reflect and maintain Grocery Gateway's focus on low cost and high service.

Teaching Note: 8B02D03 (8 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Transportation; Distribution; E-Business; Logistics
Difficulty: 4 - Undergraduate/MBA



DOFASCO - FUEL MANAGEMENT
Peter C. Bell

Product Number: 9A98E025
Publication Date: 9/23/1999
Revision Date: 1/28/2010
Length: 4 pages

The Works Manager at Dofasco was faced with rapidly increasing market prices for fuel oil and natural gas. Anticipating that similar price increases were likely to continue for the foreseeable future, he wanted to be certain that the steel works was making the best use of its energy dollars and, in particular, that the fuels produced as by-products from plant operations were being efficiently utilized. (A Microsoft Excel model is available for use with this case, product 7A98E025.)

Teaching Note: 8A98E25 (6 pages)
Industry: Manufacturing
Issues: Resource Allocation; Linear Programming; Spread Sheet Application
Difficulty: 4 - Undergraduate/MBA


Chapter 7:
Integer Programming

CRAGGIER NATIONAL PARK
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


Chapter 8:
Network Optimization Models

CANADIAN PHARMACEUTICAL DISTRIBUTION NETWORK
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



HIGHWIRED.COM: HARDWARE DECISIONS
Scott L. Schneberger, Ken Mark

Product Number: 9B00E023
Publication Date: 1/25/2001
Revision Date: 1/8/2010
Length: 11 pages

Highwired.com provided to high school students and teachers, a range of free services to enable school interaction on a personalized Web site. Highwired.com's network had grown from 1,000 member high schools to over 12,000 schools in 50 states and 72 countries, in only 13 months. Due to its blistering growth, it was approaching its peak load capacity in June, the end of the school year. The vice-president of product development expected that growth would continue at that pace and wanted to ensure that they struck the right balance between low response time and minimal downtime, and acceptable hardware costs. Any changes had to be made before school started in September. He wanted to confirm that his recommendation to use multiple servers with redundant network storage devices attached was the optimal solution. To do so, he examined site performance metrics, server configuration options and additional hardware.

Teaching Note: 8B00E23 (7 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: E-Commerce; Action Planning and Implementation; System Design; Capacity Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 9:
Nonlinear Programming

FOUR STAR MOTORSPORTS
Peter C. Bell, Ilana Rosenshein

Product Number: 9B03E006
Publication Date: 4/2/2003
Revision Date: 10/19/2009
Length: 3 pages

Four Star Motorsports is a family owned and operated garage specializing in rally cars and the sale of rally tires. In the winter, the business would have sales on tires if there was excess inventory, however, the owner was recently made aware of new pricing concepts through associates. The owner must investigate various pricing options during the upcoming selling season to increase revenue and to develop a plan that will allow adjustments for customers who are unhappy with the new pricing policy or an excess of tire inventory.

Teaching Note: 8B03E06 (7 pages)
Industry: Retail Trade
Issues: Demand Analysis; Pricing; Regression Analysis; Uncertainty
Difficulty: 4 - Undergraduate/MBA


Chapter 10:
Multicriteria Decision- Making Models

RELIABILITY LIFE DATA ANALYSIS FOR DECISION MAKING
Peter C. Bell, Sang-Won Kim

Product Number: 9B06E011
Publication Date: 6/21/2006
Revision Date: 9/17/2009
Length: 5 pages

A research institute has a concern with the reliability requirements of a military vehicle. Reliability is the probability that a system will accomplish its designated mission in a satisfactory manner or in more specific terms, the probability that it will perform in a satisfactory manner for a given period when used under specified operating conditions. Reliability of a weapon system is often expressed in terms of mean time between failure (MTBF). Two military vehicles were tested to obtain reliability life data for reliability evaluation. The objective of this case is to introduce reliability concept, MTBF, life data analysis and objective procedure for a decision making.

Teaching Note: 8B06E11 (6 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Decision Making; Life Data Analysis and Estimation; Reliability
Difficulty: 4 - Undergraduate/MBA


Chapter 11:
Decision Theory

INTRODUCTION TO REAL OPTIONS
Walid Busaba, Zeigham Khokher, Jaclyn Grimshaw

Product Number: 9B05N015
Publication Date: 8/12/2005
Revision Date: 10/4/2009
Length: 8 pages

The real options approach to capital budgeting uses an options-based analysis to evaluate the real (as opposed to the financial) potential of projects. By charting the options as a series of decision points and events, managers can understand the risks and rewards of the projects, and more fully assess their opportunities. This note introduces the real options approach and describes the four main categories: expansion and follow-on options, timing and delay options, abandonment options and options that introduce flexibility into production. The expansion option is discussed in detail, including sample calculations and decision trees.

Issues: Decision Trees; Capital Budgeting; Real Options; Expansion Option
Difficulty: 4 - Undergraduate/MBA



SCHERING PLOUGH: REPLACING CLARITIN
Chris K. Anderson, Andre Mousseau

Product Number: 9B05E010
Publication Date: 7/15/2005
Revision Date: 9/30/2009
Length: 5 pages

Schering Plough is a large pharmaceutical company with over 22,000 employees worldwide, and over $6.8 billion in sales worldwide. The company is considering two options to replace its flagship drug, Claritin (an antihistamine), as Claritin's patent is soon to expire. One drug is targeted toward nasal congestion, the other towards asthma; however, each drug is at a different stage in the development process, one has greater market potential but was still in its early development stage, the other drug could be launched within the year but would appeal to a much smaller market. The company must decide which drug to pursue or whether to focus on both drugs or neither. The case allows students to do a traditional NPV analysis and decision analysis and the use of simulation.

Teaching Note: 8B05E10 (6 pages)
Industry: Manufacturing
Issues: Net Present Value Method; Real Options; Simulation; Decision Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 12:
Markov Chain

BRILUX: THE FOT-320 DECISION
Peter C. Bell

Product Number: 9B04E018
Publication Date: 5/14/2004
Revision Date: 10/9/2009
Length: 4 pages

BriLux develops early-stage high-speed data networking equipment. In recent month, BriLux customers have hinted that combining ARTRAN, the company's flagship optical data service platform, with a new fiber optic transportation product (tentatively referred to as FOT-320) would increase the market appeal of the company's portfolio. The research and development director must decide whether to support the development of this new product. Excel files are available upon request, products 7B04E018A, 7B04E018B and 7B04E018C.

Teaching Note: 8B04E18 (10 pages)
Industry: Manufacturing
Issues: Probability; Risk Analysis; Decision Analysis; Simulation
Difficulty: 4 - Undergraduate/MBA


Chapter 13:
Waiting-time Models

CAFÉ D. POWND
Victor Siu, Chris K. Anderson, Stephan Vachon

Product Number: 9B00D007
Publication Date: 5/2/2000
Revision Date: 1/8/2010
Length: 7 pages

An assistant manager of a university student residence is aware that there are capacity and service problems in the cafeteria. Long waits in line were common, and he hoped to propose some improvements to residence management, preferably ones with no major investments or disbursements involved.

Teaching Note: 8B00D07 (9 pages)
Industry: Accommodation & Food Services
Issues: Service Operations; Queuing Theory; Simulation
Difficulty: 4 - Undergraduate/MBA


Chapter 14:
Simulation

OSTERIA DE MEDICI
Chris K. Anderson, Mike Terrigno

Product Number: 9B03E007
Publication Date: 2/27/2003
Revision Date: 10/19/2009
Length: 4 pages

Osteria De Medici is a high-end restaurant located in the downtown core of a large Canadian city. The establishment has loyal customers with very little walk-in traffic, so the management of reservations becomes key. On peak days such as New Year's Eve, Mother's Day and Valentine's Day, the restaurant would have vacant tables even though they were fully booked with advance reservations. Restaurant's management must determine if overbooking is an option, review the implications in overbooking and develop a model to determine a reservation schedule. An introduction to binomial distribution is provided.

Teaching Note: 8B03E07 (6 pages)
Industry: Accommodation & Food Services
Issues: Probability; Optimization; Simulation
Difficulty: 4 - Undergraduate/MBA



ONLINE LOW-PRICE GUARANTEES - DOLLAR.COM (A)
Chris K. Anderson, Benjamin Marcus

Product Number: 9B04E016
Publication Date: 6/24/2004
Revision Date: 10/9/2009
Length: 10 pages

Dollar Thrifty Automotive Group is an automobile rental service and has just launched its latest marketing campaign. The campaign is designed to entice customers to book car rental reservations on their website versus booking on more expensive online channels. The campaign hinges on a low price guarantee: book on Dollar's website, if rates go down Dollar will rebate you. A cost out for the low price guarantee can be determined using both historical data and potential price models, and a breakeven analysis can be performed to determine how much reservations traffic must move to Dollar.com to justify the campaign.

Teaching Note: 8B04E16 (8 pages)
Industry: Other Services
Issues: Revenue Management; Simulation; Regression Analysis; Pricing
Difficulty: 4 - Undergraduate/MBA



DOLLAR THRIFTY AUTOMOTIVE GROUP: ONLINE DISCOUNTING
Chris K. Anderson, Benjamin Marcus

Product Number: 9B05E008
Publication Date: 6/14/2005
Revision Date: 9/30/2009
Length: 4 pages

Dollar Thrifty Automotive Group (DTAG) is considering offering a price guarantee to entice consumers to use their web site. Students will be introduced to break-even analysis and general spreadsheet modeling. This is an abridged version of Online Low Price Guarantees - Dollar.com, product # 9B04E016.

Teaching Note: 8B05E08 (3 pages)
Industry: Other Services
Issues: Pricing; Models; Simulation
Difficulty: 4 - Undergraduate/MBA