Unit Outline*

TRLO8507

Modelling Logistics Systems

D7-OFF

Shanghai

Mr Brett Smith

Business Schoolwww.business.uwa.edu.au

This Unit Outline should be read in conjunction with the Business School UnitOutline Supplement available on the Current Students web sitehttp://www.business.uwa.edu.au/students

TRLO8507/Crawley/BS/01.05.11

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Copying of this material by students, except for fair dealing purposes under theCopyright Act, is prohibited. For the purposes of this fair dealing exception, studentsshould be aware that the rule allowing copying, for fair dealing purposes, of 10% of thework, or one chapter/article, applies to the original work from which the excerpt in thiscourse material was taken, and not to the course material itself.

© The University of Western Australia 2011

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UNIT DESCRIPTION

IntroductionThe unit offers an introduction to operations research models applied to supplychain management. The core learning in centred on practical solutions to supportstrategic decisions in design, planning and operating within a supply chain.

Unit contentThis unit emphasises analytical methods required to understand issues in logisticsand supply chain management. Topics include time series models for forecastingdemand; linear programming for optimising a supply chain network and for routingand scheduling transport.

The goal of the unitStudents exit the unit with an appreciation of models that may be applied tostrategic decisions in logistics and supply chain management.

Along with TRLO8515, Inventory & Distribution Management, the unit complementsthe theory presented in TRLO8506 Supply Chain Management by exposing studentsto the latest modelling techniques to support decisions in logistics management.

Learning outcomesOn completion of this unit, you should be able to:

Evaluate management science methods for business decisions

Identify the management science process and adapt this to business

decisions.

Distinguish between optimisation/satisfying for business decisions and

management of investigation into business processes. Adopt theappropriate tools for each task.

Appreciate that many activities are affected by a series of interacting

uncertainties that make it impossible to analyse precisely. In thissituation, system simulation is a valuable technique to use to rankalternatives against a decision criterion.

Apply management science tools to business logistics applications

Solve a linear program. Interpret the solution and sensitivity reports.

Apply linear programming to business logistics related decisions

Model a business decision using a simulation tool and use it to investigate

alternative strategies.

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Apply simulation to support policy decisions by modelling a business

system and using it to investigate how the system develops over time.

Demonstrate proficiency in specialised management science software

Build and solve an optimisation model using the Solver add-in to Microsoft

Excel.

Analyse decisions under uncertainty using @Risk.

Communicate modelling results

Present complex modelling procedures to non management scientists.

Prepare a business report

Build flexible DSS to respond to questions during a presentation in real

time

Educational principles and graduate attributes

In this unit, you will be provided with the opportunity to

Apply short term forecasting models

Construct a model to understand network design and transportation

operations. Through the use of well tested optimisation models you will beable to recommend efficient strategies to goods handling.

”Develop competencies to work more effectively in teams through the

completion of a group case analysis project relating to production planningand to goods movement. or

“Demonstrate self-management and independent learning skills through the

completion of the prescribed computer laboratory exercises”.

TEACHING AND LEARNING RESPONSIBILITIES

Teaching and learning strategiesOur approach is a combination of theory and discussion and problem solving. Yourcontribution to the unit is in the form of in class computer laboratory exercises andgroup case studies.

Teaching and learning evaluationYou may be asked to complete two evaluations during this unit. The StudentPerception of Teaching (SPOT) and the Students’ Unit Reflective Feedback (SURF).The SPOT is optional and is an evaluation of the lecturer and the unit. The SURF iscompleted online and is a university wide survey and deals only with the unit. Youwill receive an email from the SURF office inviting you to complete the SURF when it

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is activated. We encourage you to complete the forms as your feedback isextremely important and can be used to make changes to the unit or lecturing stylewhen appropriate.

AttendanceParticipation in class, whether it be listening to a lecture or getting involved in otheractivities, is an important part of the learning process, therefore it is important thatyou attend classes. More formally, the University regulations state that ‘to completea course or unit students shall attend prescribed classes, lectures, seminars andtutorials’. Where a student, due to exceptional circumstances, is unable to attend ascheduled class, they are required to obtain prior approval of the unit coordinator tobe absent from that class. Any student absent from class without having had suchabsence approved by the unit coordinator may be referred to the faculty for adviceand may be required to withdraw from the unit.

CONTACT DETAILSWe strongly advise students to regularly access their student email accounts.Important information regarding the unit is often communicated by email and willnot be automatically forwarded to private email addresses.

Unit coordinator/lecturer

Name: Mr Brett Smith

Email: brett.smith@uwa.edu.au

Phone: +61 8 6488 3979

Consultation: By e-mail

Lecture times: Saturday 18 June to Saturday 26 June

Lecture venue: Room 110 in Management Building

TEXTBOOK(S) & RESOURCES

Unit Website

http://webct.uwa.edu.au

Recommended/required text(s)Chopra and Meindl 2007 Supply Change Management: Strategy, Planning &Operations 3e or 4e, Pearson

Software requirements

In the computer laboratories we will use Microsoft Excel, Solver add-in for Excel,Palisade Decision Tools Suite (Student versions available with Text)

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UNIT SCHEDULE

Topic 1Forecasting

Time Room Reading/Examples

Activity Related Assessment

SaturdayMorning 18

JuneUnit outline andIntroduction toCase Study I.

8:30 –10:00

S C&M Chapter 7

Greetings and explanation of the unitPresent Case Study I Part A

SPC CASE PART A C&M p 216-7

*Form CASE STUDY I Groups. Attendance is required

Time DependentData and

ForecastingPrinciples

10:20-12:00

S C&M Chapter 7

Lecture Notes Exam: time series components; summary statistics; forecasting error statistics; Pegel’s classification

SaturdayAfternoon 18June Choosingand validating a

forecastingmodel;

ExponentialSmoothing

1:00-2:30

S C&M Chapter 7

Exponential smoothing methods; Choose appropriate forecasts for series

Exam: SES, Holt’s ES and Winters’ ES. Using forecasting statistics to choose a model; validating a forecasting model

ExponentialSmoothing

2:50-4:20

L C&M Chapter 7

Apply ES methods to sales of automobiles

SundayMorning 19

June

CASEPREPARATION

CASEPREPARATION

8:30 –10:00

10:15 –11:45

S

L

In this session you will look at writing up your case for SPC PART A. In class we will identify the objectives and the structure of the report. In the lab you will create and save the relevant descriptive statistics and forecasting results. We shall alsofind out how to upload and save to WebCT

CASE STUDY I PART A*Group Assignment Activity. Attendance is required.

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Topics 2 & 3 LPand Aggregate

Planning

Time Room Reading/Examples

Activity Related Assessment

SundayAfternoon 19

June

Mathematicalmodels: Linearprogramming &

Sensitivityanalysis

1:00-2:30

S Lecture Notes

Anderson Sweeney and Williams (2007) Chapter 2

Lecture: LP and sensitivity concepts

Kites & String

Exam: objective function; decision variables; basic, feasibleand optimal solutions. Reduced costs, range of optimality, shadow price, range of sensitivity

2:50-4:20

L C&M Chapter 8

Kites and String Exam: Aggregate planning concepts; chasing demand, inventory buffering and LP

Monday 20 June

AggregatePlanning

18:30-20:05

S

C&M Chapter 8

Lecture: Aggregate Planning

Red Tomato Tools

20:15 –21:45

L In this session you will look at writing up your case for SPC PARTB. In the lab you will create and save the relevant inputs to the Aggregate Plan. You will create your model using the Red TomatoTools XL file as a Template.

This is the completion of CASE STUDY I

Your group will need to share tasks and set deadlines to bring the work together.

CASE STUDY I PART B*Group Assignment Activity. Attendance is required.

Topic 4 Transport Models

Time Room Reading/ Examples

Activity Related Assessment

Wednesday 22June

Transport model

TranshipmentModel

18:30 –20:05

S Lecture Notes

Lecture: Transport model formulation and example

Exam: transport model formulation; interpret solver output

Transport Model 20:15 –21:45

L Transport Model in Lab

1) Transport Model

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2) Transport Model With Tax

3) Transhipment Model

Friday 24 June In this session you will look at writing up your case for BioPharm. In class we will identify the objectives and the structure of the report. In the labyou will create and save the relevant input tables for the report.

Modelling: As a first pass we will run the model for given network configuration. We call this the Base Case. To complete this you need to set up the transport model which incorporates Fixed Costs, Raw Material Costs, Production Costs and Import Tariffs.

**We ignore international exchange rates as all costs are given in U.S. Dollars.

Save this work because we compare this result to the network reconfiguration model which we will create and save tomorrow afternoon.

CASE STUDY II

PART A

18:30-20:05

S

TRANSPORTMODEL

20:15 –21:45

L CASE STUDY II PART A*Group Assignment Activity. Attendance is required.

Topic 5 Integer Programming & Network Design

Time Room Reading/ Examples

Activity Related Assessment

SaturdayMorning 25

Integer Models &Network Designwith CapacityConstraints

8:30 –10:00

S C&M Chapter 5

Lecture: contrasting IP and LP; Applicationto network design.

Exam: why are sensitivityreports not available withIPs, interpret results froma network optimisation model. What are the factors affecting networkdesign decisions

Network Design 10:20-12:00

L C&M Chapter 5

Sunoil Capacitated Network Design

SaturdayAfternoon 25

June

In this session you will look at incorporating the decision to open or close production plants.

Modelling: In addition to Fixed Costs, Raw Material Costs, Production Costs and Import Tariffs we include shut-down costs. The important modelling consideration is how to set up the constraints for open / closed plants. Once your team has decided on how to do this, the

CASE STUDY II

PART B

1:00-2:30

2:50-

S

L

CASE STUDY II PART B*Group Assignment Activity. Attendance is required.

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4:20 extension to the transport problem is simple.

**We solve the problem for 2005 data. We do not consider future years.

Save your work..

Legend: S= seminar room; L=computer lab; W&A= Winston and Albright textEach session is approximately 50 minutes

ASSESSMENT MECHANISM

The purpose of assessmentThe assessment tasks are designed to mimic real life problems faced in logisticsmanagement. Two case studies are assessed in which student teams build their ownlogistics model from case data. The main assessment criterion is whether studentteams can interpret their model’s results and communicate these in terms ofmanagement decisions.

The Student Team Case Studies are partly completed in class. This is due to thetight time frame in which MLEM units are delivered. By the conclusion of the weekyour team will have finished the models and have a draft of their business report.Teams are given an additional two weeks to polish their presentations.

The unit exam is an individualised assessment. Students will demonstrate anunderstanding on why the models are important to logistics management as well asan aptitude to interpreting results. The term paper partly examines studentsunderstanding of the applicableness of the presented decision models and partlyexamines students’ ability to communicate results for management decisionsupport.

There are a number of reasons for having assessable tasks as part of an academicprogram. The assessable tasks are designed to encourage you to explore andunderstand the subject more fully. The fact that we grade your work provides you anindication of how much you have achieved. Providing feedback on your work alsoserves as part of the learning process.

Assessment mechanism summary

Item Weight Due date Remarks

CASE STUDY I

30% July 16

(Hard Copy and WebCT)

The Assessment Task will be partially completed inclass. You will form groups of three and work on themodels during allocated times. It is important thatyou attend these sessions (see unit Schedule).

Submit Hard Copy to SMU staff on the morning of the exam. Submit a softcopy and Excel Files

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to Webct on or before the morning of the exam.

*5% of your final assignment mark will be deducted ifone day late. From there 1% per day to a maximum of 10 days. Any assignment after that time is awarded 0% unless written consent is obtained from the Dean of Students at UWA Business School

CASE STUDY II

30% July16

(Hard Copy and WebCT)

The Assessment Task will be partially completed inclass. You will form groups of three and work on themodels during allocated times. It is important thatyou attend these sessions (see unit Schedule).

Submit Hard Copy to SMU staff on the morning of the exam. Submit a softcopy and Excel Files to Webct on or before the morning of the exam.

*5% of your final assignment mark will be deducted ifone day late. From there 1% per day to a maximum of 10 days. Any assignment after that time is awarded 0% unless written consent is obtained from the Dean of Students at UWA Business School

Exam 40% July 16

Note 1: Results may be subject to scaling and standardisation under faculty policyand are not necessarily the sum of the component parts.

Note 2: Your assessed work may also be used for quality assurance purposes,such as to assess the level of achievement of learning outcomes asrequired for accreditation and audit purposes. The findings may be usedto inform changes aimed at improving the quality of Business Schoolprograms. All material used for such processes will be treated asconfidential, and the outcome will not affect your grade for the unit.

Assessment components

Case Study (30% & 30%)

CASE STUDY I: SPECIALTY PACKAGING CORPORATION A and BChopra and Meindl (2007) Supply Chain Management Pearson EducationInc. New JerseyPages 230-231 and 252-254 (note use your own forecasts for part B)

CASE STUDY II: BIOPHARMA INC.

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Chopra and Meindl (2007) Supply Chain Management Pearson EducationInc. New JerseyPages 196-198

Suggested format for Case Reports

1. Introduction 10%

Problem statement: Context of the problem and any background knowledgeneeded to understand the report. It is also important to indicate the use of yourmodelling solutions (what are the firm’s goals, how can the firm make use ofyour solution).Assumptions made: clearly indicate the simplifying assumptions used in themathematical model. This will allow the manager responsible for the decision tomake a judgement on the usefulness of the report.Solution Approach: brief description of the mathematical model. If it is astandard model (i.e. linear program) then just a statement indicating the modelused is all that is necessary. You should also indicate the software used – Excel,Extend, Solver, custom built software, etc.

2. Development of the problem 25%

Present the details of the problem. Including, the data used in the model, thesource of that data, intermediate calculations performed before the data isready for use in the model.

3. Results 40%

Present clearly and concisely. Use tables, charts and graphs (where applicable).Your results should indicate the objective function value, the decision variablevalues and demonstrate the solution is within the constraints set for theproblem.

4. Sensitivity analysis 10%

Present some - but not all - of the considered contingencies that might resultfrom changes in assumptions and parameters of the model.

5. Conclusion, Recommendation and implementation plan 15%

Summary – restate the aim of the report, the method used and a summary ofthe results. Overall Recommendation: The section involves considering both results and thesensitivity analysis. It provides the decision maker with a set of solutions todiffering scenarios.Implementation: how is you model solution going to fit into the firmsprocedures?Further analysis: The initial report may lead some insight on important butneglected components of the problem - these are indicated in the final section.

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Assessment criteria for the case studies

CASE ANALYSIS, MODELLING and DECISION IMPLEMENTATION1. Read the case thoroughly. To understand fully what is happening in a case, it is

necessary to read the case carefully and thoroughly. 2. Define the central issue(s). Many cases will involve several issues or problems.

Identify the most important problems and separate them from the more trivialissues.

3. Define the firm's goals. Identifying the firm's goals will provide a guide for theremaining analysis.

4. Develop the appropriate model and produce the modelling solution. Completethe modelling task and interpret the solution. Remember, constraints have to beconsidered when suggesting a solution.

5. Make use of your solution. Each case has a very specific Modelling Solution, butit is up to you to suggest how the firm is to use the modelling solution.

6. Develop an implementation plan. The final step in the analysis is to develop aplan for effective implementation of your decision. Lack of an implementationplan even for a very good decision can lead to disaster for a firm and for you.Don't overlook this step.

Exam (40%)

More information will be given in class.

Submission of assignments

Please remember to attach an Assignment Cover Sheet to the front of yourassignment. You can download and print your Assignment Cover Sheet from theCurrent Students web page http://www.business.uwa.edu.au/students/assessments

CASE STUDIES1. Submit a hard copy with a completed assignment cover page of your business

reports to SMU staff on the morning of July 18 – prior to the commencement ofthe final examination.

2. Lodge your business reports and accompanying Excel Models to your assignedgroup in WebCT on or before the morning of July 18.

3. 5% of your final assignment mark will be deducted if one day late. From there 1%per day to a maximum of 10 days. Any assignment after that time is awarded 0%unless written consent is obtained from the Dean of Students at UWA BusinessSchool

UWA Student Guild

Phone: (+61 8) 6488 2295 Facsimile: (+61 8) 6488 1041

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E-mail: enquiries@guild.uwa.edu.auWebsite: http://www.guild.uwa.edu.au

Charter of Student Rights and ResponsibilitiesThe Charter of Student Rights and Responsibilities outlines the fundamental rights and responsibilities of students who undertake their education at UWA (refer http://handbooks.uwa.edu.au/undergraduate/poliproc/policies/StudentRights).

Appeals against academic assessmentThe University provides the opportunity for students to lodge an appeal against assessment results and/or progress status (refer http://www.secretariat.uwa.edu.au/home/policies/appeals).

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