This is an archived course. A more recent version may be available at



We recommend the following book, and will suggest complementary readings throughout the class, as well as use some of its cases and computer exercises:

Amazon logo Simchi-Levi, David, Philip Kaminsky, and Edith Simchi-Levi. Designing and Managing the Supply Chain. 2nd ed. New York, NY: McGraw-Hill, 2003. ISBN: 0071410317. (SKS)


We also recommend and suggest the following books as useful references or complements:

Amazon logo Hopp, Wallace, and Mark Spearman. Factory Physics. 2nd ed. Boston, MA: Irwin, 2000. ISBN: 0256247951. (HS)

Amazon logo Nahmias, Steven. Production and Operations Analysis. 4th ed. Boston, MA: Irwin, 2000. ISBN: 0072417412. (N)

Amazon logo Chopra, Sunil and Peter Meindl. Supply Chain Management. 2nd ed. Upper Saddle River, NJ: Prentice Hall, 2004. ISBN: 013101028X. (CM)

Amazon logo Shapiro, Jeremy. Modeling the Supply Chain. Pacific Grove, CA: Duxbury, 2001. ISBN: 0534373631. (S)

Amazon logo Silver, Edward, David Pyke, and Rein Peterson. Inventory Management and Production Planning and Scheduling. 3rd ed. New York, NY: Wiley, 1998. ISBN: 0471119474. (SPP)

Calendar of Readings

1 Introduction and Course Overview

Read: SKS, chapter 1.

Optional Reading: CM, pp. 3-26.

Lee, Hau L., and Corey Billington. "Managing Supply Chain Inventory: Pitfalls and Opportunities." Sloan Management Review 33, no. 3 (spring 1992): pp. 65-73.


Inventory Models

This class will review basic inventory theory: periodic review order-up-to policy; continuous review reorder point policy

Read: SKS, chapter 3.

Kimball, G. E. "General Principles of Inventory Control." Technical report. Cambridge, MA: Arthur D. Little, Inc. Republished in Journal of Manufacturing and Operations Management 1 (Spring 1988): pp. 119-130.

Optional Reading: N, pp. 265-313.

HS, pp. 48-88.

CM, pp. 249-383.

3 Inventory Systems  

Supply Chain Tactical Planning

Guest Speaker: Mike Watson, Logic Tools


Supply Contracts I

These classes will introduce various types of supply chain contracts and examine how these mechanisms work, and in particular, how they help to accomplish supply chain coordination.

Read: SKS, chapter 3, pp. 53-57.
6 Supply Contracts II  

Inventory Systems (cont.)

Guest Speaker: Dan Wheeler, LFM 2000


Multi-echelon Inventory Systems

Introduction to challenges, issues and relevant models (e.g., Eppen Schrage) for multi-echelon inventory systems

Read: SKS, chapter 5, pp. 133-138.
9 Supply Chain and Postponement  
10 Supply Chain and Product Design Read: SKS, chapter 9.

Supply Chain Integration - Controlling the Bullwhip

This class will discuss the bullwhip phenomenon, sources for it, ways of characterizing it, and then some remedies.

Read: SKS, chapter 4.

Supply Chain and Safety Stock Placement

Guest Speaker - Barrett Crane, HP, LFM '96.
Barrett will speak about application of supply chain models to improve and optimize HP supply chains. In preparation you will have a computer exercise that utilizes a student-version of a tool used at HP; the purpose of the exercise will be to develop intuition for optimal placement of inventories in a supply chain.

Read: Billington, C., B. Crane, et. al. "Accelerating the Profitability of Hewlett-Packard's Supply Chains." Interfaces (Jan-Feb 2004).

Graves, S., and S. Willems. "Strategic Safety Stock Placement in Supply Chains." Proceedings of the 1996 MSOM Conference. Dartmouth College, Hanover NH, June 1996, pp. 299-304.

13 Supply Chain and Safety Stock Placement  
14 Strategic Alliances and Outsourcing Read: SKS, chapter 6.

Supply Chain Integration - Application of RFID

Wrap Up, Course Summary and Feedback for Continuous Improvement

Read: SKS, chapter 5.