Case Study Problem

SCM 315: Capstone Project Rubric 1

Background: Your capstone project will require your team to complete multiple decision analyses to solve a realistic case study. Your team will need to select one of the provided case studies, identify the appropriate decision tools to address the problems, perform any necessary research as indicated by the case study, complete thorough analyses to address all aspects of the study, and summarize your results and findings to develop meaningful recommendations.

Case Studies: Two case studies are given as options for the capstone project. Your group must choose one of

these case studies to complete for the project. All parts of the selected case study must be addressed during the project. Make sure to read the case studies multiple times, even after completing the project, to ensure you address all key aspects of the problem as each section of each case requires multiple steps/components.

Decision Support Tools:

To address the decisions presented by the case study, your team will need to use two decision support tools discussed during the second half of this course. You need to ensure you select the correct tools for your project. These possible decision support tools are:

 Linear Optimization

 Integer/Binary Optimization

 Decision Trees

 Simulation Capstone Project Submission:

Your team will only submit a report. No Excel files will be submitted or graded. Therefore, it is extremely important that your group carefully read the requirements that are listed in this rubric. The project report must be typed and consist of no more than 6 pages, excluding the appendix and title page. There is no limit to the length of the appendix. The report is due by 11:59 PM on 4/28/2017. The report is to consist of the following labeled sections:

 Title Page: o Title, Team Name, Names of Team Members, Executive Summary (one paragraph)

 Project Definition: o Summary of the problem you are attempting to address with this project

 Part 1 Approach and Analysis: o Explanation and discussion of the Part 1 model(s) you used for your analysis.

Additionally discuss the results from these models along with your recommendations.

 Part 2 Approach and Analysis: o Explanation and discussion of the Part 2 model(s) you used for your analysis.

Additionally discuss the results from these models along with your recommendations.

 Conclusions and Recommended Actions: o The final summary and overview of complete case study recommendations

 Appendix: o Include any additional supporting material (e.g. full optimization model details, full

size images of decision trees, etc.). If your figures/tables in the main body of the

SCM 315: Capstone Project Rubric 2

report make the report exceed the page limit, less important tables can be moved to the appendix.

The report must be formatted with single-spacing, 12 pt. Times New Roman text, and standard 1 inch margins. Depending on the analyses your team completed, you must include the following in the appendix when appropriate:

 Optimization o The full, written optimization model (included in the appendix) – This should be

written appropriately, uses of Excel equations is not permitted (e.g. SUMPRODUCT)  Decision Variables  Objective Function  Constraints

o Justification of any assumptions that were made if appropriate o If you created multiple models for the project, you only need to write one of the

models in the report

 Decision Tree o An image(s) of the decision tree (included in the appendix) o Justification of any assumptions that were made

 Simulation o Distributions used for any random inputs (included in the appendix) o Complete simulation model (included in the appendix)

 Random Input Variables  Fixed/Controlled Input Variables  Output Values  Simulation Equations/Functions

o Justification of any assumptions that were made IMPORTANT: You should write the body of the report as if you were writing the report for the project’s sponsor. This means that you should avoid technical details and speak in general terms about what you did. For an example, they likely don’t know what an objective function means or decision variables, but they do understand that you selected a set of vehicles (the decision variables) such that they minimized the cost of the fleet (the objective function). The appendix is for the grader and contains all of the technical information. What is absolutely required in the appendix is given below.

SCM 315: Capstone Project Rubric 3

General Frequently Asked Questions:

The following questions and answers apply to all of the cases. What analysis technique should I use for Part I/Part II of my case study?

The case studies were designed to require a specific analysis method discussed during the second half of the course (integer optimization, linear optimization, decision trees, simulation, stochastic optimization). It is your group's task to identify the most appropriate technique for each part. If you are unsure you are using the correct technique, please talk with the TA.

Can I have an optimization model with multiple objectives? (i.e. is it possible to maximize profit and minimize cost in the same model?)

No, this is not possible. We have only dealt with one objective function per model throughout the course. It is possible to have multiple objectives, but it is extremely uncommon and is an advanced technique. If you have a section which appears to call for different objectives, then you need to create a seperate model for each objective.

Our case study has us conduct multiple optimization models but requires us to only recommend one. How should we decide?

This is the first time you have been asked to do this in the course. If you have multiple answers, it is recommended you complete a cost-benefit analysis comparing all of the details of your answers with the cost or profits (depending on your case study). For example, consider Case Study 1. Compare the calcium of all of your possible food plans to their costs. Maybe one has much higher calcium but is also more expansive. Is it worth paying more for that level of calcium? That is up to your group to decide. As long as your justification is reasonable and it is clear you did the analysis, the grader will agree with you. You should do this for any details of your food plan (or fleet for case study 2 or portfolio for case study 3) that you deem important. If the case study specifically mentions that detail (like it mentions calcium, protien, etc. for case study 1), then it is probably important. By combining all of this analysis together, you should be able to recommend one option. In Part II, it seems that we may be able to conduct multiple decision trees/simulation analyses/optimization models based on the different results we obtained in Part I. Is this recommended? All of the case studies require the answer from Part I to be used as an input into Part II. Therefore, it is possible to try different answers from Part I (other options besides the one you recommended) to see how they perform in Part II. The extra effort will be rewarded.

What do we turn in?

You will only be submitting your report. No Excel workbooks will be opened and analyzed.

SCM 315: Capstone Project Rubric 4

How should the report be formatted?

The details of what is required in the report are listed in the rubric. Most importantly, the body of the report (everything but the appendix) should be written as if it will be read by the sponsor of the project (for instance, Lewis Hamilton in case study 1). This implies that they don't know what optimization is and they likely do not care. Hence, you should write enough detail to tell the sponsor what you did, but do not bore them with all the details or technical terms. For example, you may want include sentences like: "An optimization model was developed which minimized the overall cost of the fleet of 40 cars but adhered to all of the requirements such as ..." "The model included the following requirements: ..." "The fleet which had the maximum mpg highway has 3 Toyota Camrys, ..." And probably avoid sentences like: "The objective function of the model is the sumproduct of the decision variables by the vehicle costs ..." "The model has 20 decision variables and they are ..." My best advice is to write the report as if you are explaining the project to your grandmother/grandfather. They likely don't know/care much about the details/computer work required, but they can understand it as long as you speak in basic/general terms. The appendix of the report is for the grader and is where you will indicate the details about your specific work (the optimization models you conducted, the simulation analyses, the decision tree, etc.) What is required in the appendix is stated in the rubric.

It is the end of the semester and I burnt out. Can I be lazy in my report?

No. Submitting a report where you do not explain all of your work and results is not acceptable and extremely obvious. Please be thorough in your report (especially the appendix) to avoid any point deductions.

Case Study 3 Frequently Asked Questions:

How should I decide the return threshold when I minimize Beta, etc.?

The best order of operations for Part I is to first determine the maximum possible return. Once this is known, you can set a return threshold based on this maximum by minimizing Beta such that the portfolio does not go below 90% of the maximum return possible. This 90% just an example and you are free to use whatever you deem reasonable (to determine reasonable, think about however much you would imagine the sponsor would be responsible earning below the maximum and set this as the minimum threshold, then test threshold values between this minimum and the maximum). As stated, you should test multiple thresholds, but 3 or 4 is fine.

SCM 315: Capstone Project Rubric 5

How to calculate yearly return?

To determine yearly return for a stock, you take three pieces of information: Shares invested, Current share price, one year growth. By multiplying these three items, you can estimate the value of your investment in a year.

Case Study 4 Frequently Asked Questions:

How should I decide the budget when I minimize greenhouse gas emissions, etc.?

The best order of operations for Part I is to first determine the minimum cost location and production plan. Once this is known, you can set a budget based on this minimum cost by minimizing greenhouse gas emissions such that the location and production plan does not exceed 125% of the minimum cost identified. This 125% just an example and you are free to use whatever you deem reasonable (to determine reasonable, think about however much you would imagine the sponsor would be responsible spending over the minimum and set this as the maximum budget, then test budget values between the minimum and this maximum). As stated, you should test multiple budgets, but 3 or 4 is fine.

What does North America include?

It may seem obvious, but North America includes the US, Canada, and Mexico.