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OPRE 6363: Managing Inventory

Tuesday/Thursday 5:30-6:45 p.m.


Course Instructor Prof. Holly Lutze,, SOM 3.403

Office hours: Monday, 5:30-6:45 p.m. (online)
OR by appointment (in person)
Teaching Assistant Manoj Vanajakumari,, SOM 3.224
Office hours: Tuesday, 4:00-5:30 p.m.
Course Objective We will study inventory control as a competitive strategy. The material includes
analysis and application of deterministic and simple stochastic inventory models.
Course concepts are presented through a combination of theory, problem solving,
and case discussion.
Prerequisites OPRE 6302 & exposure to probability (or consent of instructor)
Related Courses OPRE 6366: Supply Chain Management
OPRE 6370: Logistics and Distribution
Textbook Inventory Management and Production Planning and Scheduling
By Edward A. Silver, David F. Pyke and Rein Peterson
3rd edition published by John Wiley & Sons, Inc., 1998.
Course Units I. Fundamentals & Forecasting (~2.5 wks): Chapters 1-4, Northco (A) (HBS 9-697-017)
II. Deterministic Demand (~2.5 wks): Chapters 5-6,
Brazilian Chemical Company (Intl. Trans. in Op. Res. 6 (1999) 623-637)
III. Probabilistic Demand (~3 wks): Chapter 7, Progistix-Solutions Inc. (HBS 905D02)
IV. Special Classes of Inventory (~3.5 wks): Chapters 8-10,
Paper and More (HBS 9-604-093)
V. Multi-product & Multi-echelon (~2.5 wks): Chapters 11-12, Inventory Game
Grading Method 10% Class Participation
(i) Each student is expected to contribute to regular classroom discussion.
(ii) Students are required to purchase a copy of each of the four Harvard Business
School cases listed above through the on-campus bookstore.
(iii) During 2 assigned course units, each student must bring in and present to the
class one article pertaining to course material. The article must be at least three
pages long in its original (published) format and must be submitted to the
instructor for approval at least one day prior to presentation.
The presentation (via Microsoft PowerPoint) should last no longer than 5
minutes and should consist of three parts: a brief statement of what course
concepts are related, a summary of the article, brief description of how the article
contributed to the student’s understanding of inventory control. A soft-copy of the
slides should also be submitted to the instructor within one day of delivery.
10% Homework Average
Students will receive weekly homework assignments. Students may work together
but must prepare answers individually, with full understand of what they write.
Identical assignments will be in violation of university regulations and will receive
no credit. All homework must be submitted by the beginning of class on the day it
is due, and no late homework will be accepted. On-line submission of homework
assignments to the TA should be sent through WebCT. Homework assignments
and solutions will be posted on a discussion board in WebCT.
75% Quizzes 1-5
Each course unit will be followed by a quiz on the covered material. Each quiz
counts for 15% of the final course grade. All quizzes are closed-book, closed-note.
5% Inventory Game Performance & Report
Individual student access costs $20, and this amount must be paid via a check
made out to “Responsive Learning Technologies.” Students will be divided into
teams and asked to control the inventory of a regional company in an on-line
simulation that lasts 7 days and approximately 30 minutes. Teams will compete
with each other in overall cost performance, with the members of the winning team
receiving two points added to their final course grade. Each team must also submit
a four-page memo; details to follow.

Course Calendar
Date Topic Due
1/9 Strategic Inventory Management: 1.1-1.3, 2.1-2.4
1/11 Framework for Inventory Management: 3.1-3.4, 3.6-3.11
1/16 Forecasting: 4.1-4.6 HW 1
1/23 Northco (A) [HBS 9-697-017] HW 2
1/25 Quiz #1: Chapters 1-4
1/30 Level Demand: 5.1-5.3, 5.5-5.10
2/6 Time-Varying Demand: 6.1-6.8 HW 3
2/8 Brazilian Chem. Company [Intl. Trans. in Op. Res. 6 (1999) 623-637]
2/13 Quiz #2: Chapters 5-6 HW 4
2/15 Probabilistic Demand – Continuous Review: 7.1-7.7
2/22 Probabilistic Demand – Periodic Review: 7.8-7.11
2/27 HW 5
3/1 Quiz #3: Chapter 7
3/13 Progistix-Solutions Inc. [HBS 905D02] HW 6
3/15 Class A Inventories: 8.1-8.7
3/20 HW 7
3/22 Class C Inventories: 9.1-9.5
3/27 Style Goods & Perishables: 10.1-10.7 HW 8
3/29 Paper and More [HBS 9-604-093 (Analyses 1 & 2)]
4/3 Quiz #4: Chapters 8-10 (4/4) HW 9
4/5 Inventory Game Introduction
4/10 Coordinated Replenishments: 11.1-11.5
4/17 Multi-echelon Inventories: 12.1-12.4 HW 10
Quiz #5: Chapters 11-12