ESD.260J | Fall 2006 | Graduate

Logistics Systems


Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session

Course Description

This subject is a survey of the fundamental analytic tools, approaches, and techniques which are useful in the design and operation of logistics systems and integrated supply chains. The material is taught from a managerial perspective, with an emphasis on where and how specific tools can be used to improve the overall performance and reduce the total cost of a supply chain. We place a strong emphasis on the development and use of fundamental models to illustrate the underlying concepts involved in both intra and inter-company logistics operations.

The three main topic areas we will focus on are:

  • Demand forecasting, planning, and management,
  • Inventory planning, management, and control, and
  • Transportation planning, management, and operations.

Additionally, we will discuss:

  • Vehicle routing, scheduling, and fleet dispatching,
  • Supply chain network design,
  • Procurement, sourcing, and auctions,
  • Management and minimization of supply chain uncertainty, and
  • Supply contracts and collaboration.

While our main objective is to develop and use models to help us analyze these situations, we will make heavy use of examples from industry to provide illustrations of the concepts in practice. This is neither a purely theoretical nor a case study course, but rather an analytical course that addresses real problems found in practice.

Course Objectives

The four primary objectives of this course are:

  1. Introduce the analytic model based approach for solving logistics and supply chain problems,
  2. Reinforce the importance of using total supply chain costs in all analysis,
  3. Provide students with techniques for measuring and managing supply chain uncertainty, and
  4. Introduce the idea of using segmentation and a portfolio of solutions, rather than a single approach, for real-world logistics problems.


Permission of instructors. The course also presumes a basic understanding of calculus, probability, statistics, and linear programming. Standard spreadsheet programs (such as Microsoft® Excel) will be sufficient for the required analysis.

Course Requirements and Grading Weights

  • Problem Sets: (60%) A total of 4 problem sets and 3 team assignments will be assigned throughout the semester. The problem sets focus on understanding the mechanics and fundamental concepts and are therefore individual assignments. Team projects are more extended and include real data. Each is weighted equally.
  • Final Exam: (35%) The final exam will cover the entire course and will be held on the last day of class in Ses #27. It will not be held during the final exam period. The class text book and a limited set of notes will be allowed in the Final Exam.
  • Class participation: (5%) Students are encouraged, and expected, to contribute in all class discussions - with special emphasis on their experiences with these concepts.

Required Text

[SPP] Silver, Edward, David Pyke, and Rein Peterson. Inventory Management and Production Planning and Scheduling. 3rd ed. New York, NY: John Wiley & Sons, 1998. ISBN: 9780471119470.

Miscellaneous papers and manuscripts will be posted on the MIT Server and are referred to by the authors and publication date.

Optional Texts That You May Find Useful for Your Library

[N] Nahmias, Steven. Production and Operations Analysis. 5th ed. New York, NY: McGraw-Hill, 2004. ISBN: 9780071238373.

[CM] Chopra, Sunil, and Peter Meindl. Supply Chain Management. 3rd ed. Upper Saddle River, NJ: Prentice Hall, 2006. ISBN: 9780131730427.

[B] Ballou, Ronald. Business Logistics Management. 5th ed. Upper Saddle River, NJ: Prentice Hall, 2003. ISBN: 9780130661845.

[CT] Cachon, Gerard, and Christian Terwiesch. Matching Supply with Demand: An Introduction to Operations Management. New York, NY: McGraw-Hill, 2005. ISBN: 9780072918991.