01 — Notebook Information & Scope
Master Exam Strategy
“Examiners test three integrated competencies: (1) Strategic fit diagnosis using Fisher’s matrix, (2) Mathematical rigor in EOQ/EPQ and safety stock derivations, and (3) Operational precision in warehouse material flows and INCOTERMS risk allocation.”
- Domain: Operations & Supply Chain Systems
- Subject: Logistics & Supply Chain Management
- Pedagogical Leads: Prof. Ajit Maurya, Prof. Manoj Dagaonkar, Prof. Praful More
- Core Reference Model: The 15-Session Tripartite Curriculum & 2023–2025 Past Exam Frequency Map
02 — High-Frequency Topic Frequency & Exam Weighting
Based on an exhaustive audit of past examination papers (2023, 2024, and 2025), questions consistently cluster around five core thematic pillars:
| Exam Theme | Primary Professor Focus | Typical Marks | Frequency Pattern | Key Required Elements |
|---|---|---|---|---|
| Fisher Strategic Fit Matrix | Prof. Ajit Maurya | 10–15M | Appears every year | Functional vs Innovative, Efficient vs Responsive, Zara/Campbell cases |
| Bullwhip Effect & Remedies | Prof. Ajit Maurya | 10M | 90% occurrence | 4 root causes, Beer Distribution Game, VMI/CPFR solutions, variance ratio |
| EOQ / EPQ & Quantity Discounts | Prof. Manoj Dagaonkar | 10M | 100% occurrence | Derivation of Q*, total cost curves, price break feasibility checks |
| Stochastic Safety Stock & ROP | Prof. Manoj Dagaonkar | 10M | 85% occurrence | $Z \cdot \sigma_d \sqrt{L}$, demand vs lead-time uncertainty, service levels |
| Warehouse Layout & Cross-Docking | Prof. Praful More | 10M | 90% occurrence | U-shaped flow, dock doors, Golden Zone, ASN/WMS prerequisites |
| INCOTERMS 2020 & EXIM Freight | Prof. Praful More | 10M | 80% occurrence | EXW vs FOB vs CIF vs DDP, risk vs cost transfer points, Bill of Lading |
03 — Master Formula Bank for Exam Preparation
1. Deterministic Lot Sizing
- Classical EOQ:
$Q^* = \sqrt{\frac{2DS}{H}}$ - Total Annual Variable Cost:
$TVC(Q^*) = \sqrt{2DSH}$ - Economic Production Quantity (EPQ):
$Q^*_{EPQ} = \sqrt{\frac{2DS}{H(1 - d/p)}}$ - Max Inventory in EPQ:
$I_{max} = Q(1 - d/p)$
2. Stochastic Safety Stock & Service Level
- Reorder Point (Constant L):
$ROP = \bar{d} \cdot L + Z \cdot \sigma_d \sqrt{L}$ - Safety Stock (Constant L):
$SS = Z \cdot \sigma_d \sqrt{L}$ - Safety Stock (Uncertain L and Demand):
$SS = Z \cdot \sqrt{\bar{L}\sigma_d^2 + \bar{d}^2\sigma_L^2}$ - Newsvendor Critical Fractile:
$P(D \le Q^*) = \frac{C_u}{C_u + C_o}$
3. Network Design
- Center of Gravity:
$X^* = \frac{\sum X_i W_i}{\sum W_i}, \quad Y^* = \frac{\sum Y_i W_i}{\sum W_i}$
04 — Comprehensive Past Question Bank & Model Walkthroughs
[numerical](12 Marks)
A company faces an annual demand of 12,000 units for an electronic component. Ordering cost is $60 per order. Unit purchase price is $25. Holding cost is 20% of unit price per year. The supplier offers a quantity discount: for orders of 1,000 units or more, unit price drops to $23. Should the company accept the discount?
▸Reveal Model Solution & Answer Blueprint
1. Baseline Analysis (No Discount, Unit Price C = $25):
- Holding cost H1 = 0.20 * 25 = $5.00/unit/year.
- EOQ1 = sqrt( (2 * 12000 * 60) / 5 ) = sqrt( 1440000 / 5 ) = sqrt( 288000 ) = 536.66 units.
- Total Annual Cost at EOQ1:
TC1 = (D * C1) + (D / Q * S) + (Q / 2 * H1)
TC1 = (12000 * 25) + (12000 / 536.66 * 60) + (536.66 / 2 * 5)
TC1 = 300,000 + 1,341.64 + 1,341.65 = $302,683.29.
2. Discount Analysis (Unit Price C = $23 for Q >= 1,000):
- Holding cost H2 = 0.20 * 23 = $4.60/unit/year.
- Unconstrained EOQ2 = sqrt( (2 * 12000 * 60) / 4.60 ) = sqrt( 1440000 / 4.60 ) = 559.44 units.
- Because 559.44 < 1,000, EOQ2 is not feasible for the discount price.
- The lowest order quantity to qualify for the discount is Q = 1,000 units.
- Total Annual Cost at Q = 1,000:
TC2 = (D * C2) + (D / Q * S) + (Q / 2 * H2)
TC2 = (12000 * 23) + (12000 / 1000 * 60) + (1000 / 2 * 4.60)
TC2 = 276,000 + 720 + 2,300 = $279,020.00.
3. Decision Comparison:
- Annual cost without discount: $302,683.29
- Annual cost with discount at Q = 1,000: $279,020.00
- Net Annual Savings: $302,683.29 - $279,020.00 = $23,663.29.
- Recommendation: Accept the discount and order in batches of 1,000 units.
[theory](10 Marks)
Elaborate on the Beer Distribution Game simulation. Explain how lack of visibility and delays generate erratic oscillations across supply chain tiers, and what behavioral tendencies exacerbate the crisis.
▸Reveal Model Solution & Answer Blueprint
1. Overview of the Game:
Created at MIT Sloan, the Beer Distribution Game simulates a 4-tier linear supply chain: Retailer, Wholesaler, Distributor, and Factory. Each tier makes independent order decisions with 2-week transportation and information delays.
2. The Trigger:
A small, steady increase in consumer demand (from 4 cases/week to 8 cases/week) occurs at Week 5 and remains constant.
3. Propagation of Distortion:
- Retailer experiences brief backorders, panics, and doubles orders to the Wholesaler.
- Wholesaler observes the order spike, attempts to cover backorders and rebuild safety stock, placing an even larger order to the Distributor.
- By the time orders reach the Factory, order requests surge to 40+ cases/week.
- When the surge of produced beer arrives downstream weeks later, demand has stabilized at 8 cases/week, leaving all tiers choked with catastrophic excess inventory.
4. Behavioral Drivers of the Crisis:
- Lack of Shared Point-of-Sale Visibility: Each tier treats upstream orders as true demand.
- Misperception of Feedback: Players fail to account for inventory already in the transportation pipeline.
- Panic and Hoarding: Fear of backorder stockout penalties induces irrational over-ordering.
05 — Active Recall Flashcards & Conceptual Quiz
🗂 Flashcard • Key ConceptClick to Flip
When evaluating a quantity discount schedule, what order quantity should be evaluated if the calculated EOQ falls below the discount threshold?
Reveal Definition / Answer ↓
Evaluate the total annual cost at the exact minimum threshold quantity required to qualify for the discount (the price break point), since total cost increases for any quantity beyond the break point if EOQ lies to its left.
🗂 Flashcard • Key ConceptClick to Flip
What are the three core legal functions of an Ocean Bill of Lading (B/L)?
Reveal Definition / Answer ↓
1. Receipt of cargo issued by the carrier. 2. Evidence of the contract of carriage. 3. Document of title (negotiable instrument enabling cargo transfer).
Conceptual Check / QuizActive Recall