Supply Chain Management

Due by 11 pm August 25th

Chapter 15

Supply Chain Management

Upload the completed assignment using the file extension format Lastname_Firstname_Week9.doc.

Note: You can team up with one of your classmates to complete the assignment (not more than two in a team); if you want to work on the assignment individually, that’s also fine. If you are working in teams, then only one submission is required per team; include both the team members’ last names as part of the assignment submission file name as well as in the assignment submission document.

Please provide detailed solutions to the following problems/exercises (1 simulation exercise x 32 points):

Simulation Exercise: Global Supply Chain Management Simulation

Learning Objectives

This interactive online simulation allows you to try your hand at managing the complexities of a global supply chain by putting you in the shoes of the supply chain manager of a mobile phone manufacturer who is responsible for the rollout of two models of mobile phones. This simulation illustrates key concepts of supply chain management, such as: creating a balanced supply chain across suppliers with different lead times, building flexibility into the supply chain to avoid stock-outs and excess inventory, and evaluating and using demand forecasts. Your success is measured by company profits as well as through a dynamic evaluation process in which you answer probing questions from the company’s board members.

Simulation Description

The simulation gives you the opportunity to design, and manage the supply chain of a global cell phone manufacturer. During the simulation exercise, you will design the cell phone product line, forecast demand, choose a set of suppliers with different costs, lead times, and capacities, and allocate production among your chosen supplies. After completing the product and supply chain design phases, you can observe monthly demand being revealed dynamically, and have opportunities to respond to demand shifts and unexpected events. To manage the mobile phone lines successfully, you must balance competing priorities and create a supply chain that is flexible enough to react quickly to fluctuating demand.

The simulation is repeated over a four year period, allowing you an opportunity to refine your decision processes each year after learning from the feedback you receive about the previous year’s results.

This simulation teaches important concepts of supply chain management, including:

· How to create a cost-effective and flexible supply chain using a combination of more expensive, short-lead time and less expensive, long-lead time suppliers. You will allocate production among different suppliers and experience the trade-off between costs and lead times.

· How to build flexibility into the supply chain to reduce stock-outs and excess inventory in the context of uncertain demand, and how to determine the appropriate degree of flexibility required for different products and different contexts. In the simulation, flexibility stems from supplier capabilities and production planning methods. You will also learn how to evaluate the costs and benefits of adjusting production as actual demand patterns emerge.

· How to evaluate forecasting methods and interpret the dynamics of a forecasting team. You will learn how to evaluate and interpret critical forecast information as you listen to your “colleagues” voice individual and consensus demand forecasts (your “colleagues” are virtual and come as part of the simulation package). You will learn to look for important indicators of demand volatility that help you better design and manage the supply chain.

· How to build a production plan based on a probabilistic demand forecast.

· How to weigh the relative importance of results and performance measures. At the end of each playing cycle, the company’s virtual board of directors will evaluate your performance. Using a dynamic evaluation process based on your actual decisions, the virtual board members will ask questions and judge your performance. This interaction allows you to reflect on your choices and helps deepen understanding of insights gained from the simulation. In addition, profits for each period are computed, so you can measure your performance based on board votes, profits, or a combination of both.

Before Accessing the Simulation

Read through the simulation manual carefully and familiarize yourself with the how to play the simulation (I have uploaded this simulation manual in the week’s folder). This simulation manual (as well as a short overview movie about the simulation) is available on the simulation site (the manual and the movie are on the “Prepare Screen” – you will be taken to the “Prepare Screen” once you click on “Launch the Simulation”).

Accessing the Simulation

Access the simulation using the following link (this is a Course Link) – copy and paste it in your browser window if you are not able to follow the link from this document:

I already register. This the account information.

user: samliu521


Once you are in your course section, “OPM 200-900 2014” click “Run Simulation” to begin the simulation.

Sample Time Schedule

In my experience (in f2f classes), setting time limits for completion of a simulation assignment typically increases the learning experience. I would suggest the following time schedule to complete the simulation (this is just a general/recommended guideline; you can complete the simulation at your convenience):

Simulation Run (2 hours)

Introduction and Setup (10 minutes)

Year 1 (45 minutes)

Year 2 (25 minutes)

Year 3 (20 minutes)

Year 4 (20 minutes)


Once you complete the simulation exercise, provide a brief write-up for the questions given below and submit the same in BB Vista.

Review the questions before you start the simulation and take notes as you play the simulation so that it would be easy for you do the write-up. Also, taking notes would help you better respond to questions that the virtual board members may ask about your choices.

The four excel record sheets uploaded in the week’s folder should be useful in helping you jot down the reasons for the choices you make (submit these also).

1) Option Choice: How did you think about which options to choose? (think about this in terms of: what criteria did you use to select options? what were the trade-offs you considered? what analyses did you conduct?)

2) Forecast Room: What did you use for your forecast?

3) Production Room: How did you decide which suppliers to use? When is it worth choosing a close plant costing an additional $10 per unit? For long lead time plants, is it worth it to pay an extra $1 million to save 1 month in lead time? For short lead time plants, it is worth it to pay an extra $1 million for an incremental capacity of 4000 per month?

4) Production Room: How did you think about setting the initial production levels?

5) Production Room: How did you decide whether to issue production change orders? How did you think about the value of the adjusting production levels compared to the $2 million cost?

6) Production Room: Did you invest in the Celldex show? How did you think about the value of the information compared to the $2 million cost?



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