Business logistics, globally optimal solution, student teams, network modeling


"This article describes an educational exercise that demonstrates the value of coordination within a supply chain environment while exposing students to the conflict between locally and globally optimal supply chain decisions. This exercise allows students to formulate, model, and solve a problem relating to the design of a small supply chain network. The exercise begins with student teams developing a solution that is optimal from each team’s local perspective. A solution that is globally optimal is then developed. As is often the case in a real-world supply chain, the solutions that are optimal for each team do not (when combined) yield the globally optimal solution. The student teams are then asked to negotiate to develop a solution that is amenable to all teams."

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