Ivey Publishing
JSW Steel Ltd: A Logistics Dilemma (B)
Product Number:
9B18E011
Publication Date:
08/22/2018
Revised Date:
08/22/2018
Length:
6 pages (3 pages of text)
Product Type:
Case (Field)
Source:
Ivey
In 2015, the assistant general manager at JSW Steel Ltd. (JSW), one of India’s largest steelmakers, faced a dilemma. Should JSW continue to transport the company’s end products to clients, or should JSW instead outsource the transportation to a third-party provider? Outsourcing would ensure timely delivery but would increase the cost. Another option was to pay an agency a premium for sharing information on the availability of Class I and Class II barge vendors. Class I barges were more reliable in terms of on-time and damage-free delivery, whereas Class II barges had a smaller capacity, were less reliable, and had a greater risk of goods being damaged, for which JSW could face both monetary and non-monetary losses. Although the Class I barges led to higher payoffs, the outsourcing option offered a fixed and relatively lower payoff. The assistant general manager’s objective was twofold: to meet the customer requirements in time and to benefit JSW financially. How should he decide which option to pursue?
Learning Objective:
This case can be used to teach decision making under risk in a decision analysis, management science, or operations research course in a postgraduate program in management, industrial management, or industrial engineering. After working through the case and assignment questions, students will have developed their ability to do the following:
  • Describe decision making under risk in logistics management.
  • Explain the basic concept of probability theory in general and Bayes’s theorem in particular.
  • Define the concepts of prior probability, conditional probability, joint probability, unconditional probability, and posterior probability.
  • Develop a decision tree from the data provided and calculate the expected payoffs through the expected monetary value approach.
Issues:
Disciplines:
Management Science
Industries:
Manufacturing
Setting:
India, Large, 2015
Intended Audience:
MBA/Postgraduate
Price:
$4.25 CAD / $4.25 USD Printed Copy
$3.75 CAD / $3.75 USD Permissions
$3.75 CAD / $3.75 USD Digital Download
Associated Materials
Use With: 9B17E008 (7 pages)
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