Operations Management: An Integrated Approach, 5th Edition

CASE: Electronic Pocket Calendars Supply Chain Management Game

In this supply chain game, retailers sell electronic pocket calendars to their customers and place replenishment orders to their wholesaler. The wholesaler sells the pocket calendars to the retailers and orders the calendars from a distributor. The distributor sells the pocket calendars to the wholesalers and orders calendars directly from the factory. The distribution system is shown in the figure. For each period the game is played, participants must follow the same sequence:

1. Receive any shipments into inventory.
2. Ship calendars to satisfy both new customer demand and any back orders, as long as sufficient product is available.
3. Determine the ending inventory (a negative value indicates back orders exist).
4. Determine the inventory position (ending inventory plus any quantity already ordered).
5. Place replenishment orders.

For this game, inventory holding costs will be $10 per case per week and back order costs will be $15 per case per week.

Each person must keep track of his or her own costs. The weekly demand at the retailers will be provided by your professor. Once the demand is known by the retailers, the retailers place the appropriate replenishment orders with the wholesalers. The wholesalers update their inventory records and place the necessary orders with the distributor. At this point, the distributor updates its inventory records and places the appropriate replenishment order with the factory. Lead time throughout ...