 Hello everyone. Welcome to the first live event in SC1x supply chain fundamentals. We're really excited that you're here with us. I'm here joined with Dr. Chris Kappels, Executive Director of CTL. I'm Sina Gullara, the coarsely for 1x. So today we're going to go through, let me switch over to the slide, today we're going to go through an overview of the course. We will start with the big picture and the MicroMasters credential. The course that you're in right now is one course out of a series that will prepare you step-by-step for successful career in supply chain management. So we'll tell you more about that. Chris will explain the details and several different pieces of it. Then we'll take a deeper dive and we will focus specifically on SC1x and I'll give you some important details and reminders. Then we will talk about specifically the content that we're covering in the course and we will link it to practical problems that you may face in your future job and how what you will learn in the course helps. We will wrap up with the question and answers. I also do want to mention that we have a live poll on Slider. Hopefully by now you have played with it a little bit and know where to find the polls. It should be really easy. Just find a tab called polls and then answer. That first question is what SC1x courses have you taken already? While you're answering that, I'm going to have I'm going to just advance give you some general information about our program. We are just approaching 280,000 learners enrolled in our courses. So far that's a huge group. So far we have issued 20 over 28,000 certificates for individual courses. Hopefully you will also be one of those in at the end of the course. We have also issued 1277 credential so far. So these are the people who have completed the MicroMasters series. Congratulations to them. So I'm going to hand it over to Chris to explain in more details about the program and the different courses in it. Chris. All right. Thanks. I appreciate seeing that. Welcome everyone. Welcome to 2019. This is the eighth or ninth, eighth running of the course. Does that sound right? And this is the second time you've gone through. Yes. Awesome. So we have a polling question out there right now and it looks like about two-thirds of you. This is your first ever SCX course. That's awesome. It's a great course to start on. This was actually the very first course that I created back in the summer of 2014. Now we've changed it and improved it since then, but it's really the first one that we created. And then it looks like about a quarter of you have taken SC0X first, which is our analytics course, which is great and you'll use a lot of those tools. But it's always interesting to see about 10, 12 percent of you have already taken SC1X and you loved it so much you're going to take it again. Either that or you didn't do so well on the final. But that's okay. That's glad to have you back. And then always having a smattering of people who've taken some of the higher level courses, SC3X, 4X, and 2X, and we'll talk more about that. But what you see on the slide in front of you is the curriculum. And we set this up as five courses that are fit together and they build off each other. SC0X, like I said, is the analytics course. This course SC1X will talk more in detail in a few minutes, but it's the fundamentals course. It's the classic logistics supply chain course that is taught in any grad program. SC2X is all about design, looking at the design of the flows, the physical flow, the financial flow, and the inventory flows that characterize supply chains. Then in SC3X and 4X, we kind of shift gears. The first three courses, 0, 1, and 2, are all quantitative. Models, optimization, simulation, regression, but then in 3X and 4X, we kind of take a left turn and in 3X, we look at complexity. Because even if you have a model, the real world gets in the way sometimes. And we talk about what happens when you cross borders and you have global supply chains. What happens if there are disruptions? How do you handle this complexity? And we have a lot of tools involved with that. And SC4X is all about looking at systems. So doing things in a spreadsheet is how we're going to do a lot of things in this course. But if you're going to work for a large company, chances are you're going to use some systems. And so we'll teach you about relational databases. We'll teach you about enterprise requirements, planning systems, ERPs, WMSs, TMSs, all those systems that are used in large-scale systems. So if you put them all together, you go from analytics to fundamental models to design, understanding complexity, and then large-scale systems, it all fits together and hopefully completes or it gives you a good base learning in supply chain management. And then, of course, you take the comprehensive final exam if you want to earn the MicroMasters credential. And as Seema said, we've had about just over 1,200 of those have completed all five courses successfully and passed the comprehensive final. But let me dive a little deeper into just the MicroMaster itself. You know, the value prop is we always like to explain why we think this makes sense for people to earn the MicroMasters. It's two big things. One, it's helping you on your professional career. It's giving you the framework that you need to operate in any supply chain across the world. As supply chains get more quantitative, more data driven, more model driven, you need to have these underlying skills. You might end up spending your whole career in transportation or maybe in demand planning, but you need to know what the other pieces of supply chain are. So this will really help you in your career development. And then the other thing, it could help lead you to a follow on graduate degree because this can be a pathway to earning a master's degree here. Because if you earn them back, the MicroMasters credential and apply to MIT and get into our supply chain management program, we give you a semester's worth of credit. And MIT has never done this before. We're the first ever program for this. In fact, and so what you do is you come here and in one semester, you can earn the master's degree that usually takes a full year. And in fact, on Monday, our new cohort of supply chain management blended students, those who finished the MicroMasters and got accepted to MIT, they just started. And so they're here now, they're actually in the room right next to us. So we won't be too loud. We want to disturb them. But this is a great pathway, but it's not just our program. There are also other programs if we can switch the slides. OK. Yeah, there we go. Yeah. So this is this is a picture of last year's it was the first year's cohort when they graduated about 40 students. And this year we have just about that same number. But you can do this to other programs as well. So not only do we accept the MicroMasters as credit, there's many other universities across the world. And I encourage you, if you want to get a graduate degree, this is a great way if you're a little older, you don't want to take a full year off. This is a much faster way to get a master's program. And if you're interested in that, please let us know. Another thing that we do to complement what we're doing here in the MicroMasters is boot camps. And as you if any of you have taken online courses and many of you have, you'll understand that there's certain things that you can do really well on an online course and certain things that online courses are not that well suited for. One thing that's not as well suited for is like team based exercises. And so what we do in the boot camp, it's a very interactive five day event where we bring people together and we do case studies, team exercises, workshops, things that you can only get when you're face to face. And in business, as most of you know, you need to have both skills. We like to say you need to know the correlations. You need to know the math, but you need to know how to work the corridors. You need to know how people work because a lot of good ideas die every day. And so you need to have both the hard skills and the soft skills. And the joke is that some of those soft skills, how to speak, how to present, how to convince are some of the hardest skills to learn. So that's what the boot camps for. And we have one coming up in July. And so just some more details on this. We'll be sending more information out on this. A lot of the people who are on the videos will also be presenting as part of this with addition to some other people coming in from industry. And so there's a lot of things that we're going to cover. And again, it's really all about that face to face understanding and how you can learn how to become a better manager and dealing with people. The last thing I want to say before we get into details of SC1X itself is just talk about you guys, the MicroMasters community. When we started this journey, gosh, five years ago now, four and a half years ago, we didn't know what it was going to be like. And we're constantly surprised. And so what you see on the slide here are pictures of groups or communities that were formed by spontaneously, not by us, by individuals across the world. And those different ones in Germany and Peru, and they send us pictures. So I encourage you to reach out to other learners, form groups, study groups, because it'll help you get through the courses. But also, when you finish the courses, this becomes your network. All supply chains are global. And so you need to have that global network just to understand and improve your career going forward. So this is a great chance to get that started. And again, some of the biggest assets that we have in the MicroMasters program are you guys. And so I hope you guys can reach out to each other and form communities. So that's just a quick overview of the MicroMasters, the five courses put together, what it can lead you to, whether it's a graduate degree or that standalone credential itself. And hopefully that gave you a flavor of those kind of things. Awesome. Thank you very much, Chris. So we are going to now dive deeper into the SC1X course and just look at some of the important things that you need to keep in mind going forward. Well, I'm really excited to say you are one of the 18, almost 18,000 learners that are in SC1X right now. And we have just about 1000 students verified. That's an exciting and huge group. Over 173 countries are represented. And we have also hired 12 CTAs that will be helping you in the discussion forum mostly and answering all of your questions. Make sure you use that resource to your advantage. We're managing it very closely and to make sure any kind of questions and troubles you have in the course is addressed right away. A couple of key deadlines. The course will end, of course, on April 3rd. I'd like to, I'd like you to take note of the two important dates. Midterm and final. Midterm is going to be open for one week. During that one week, you have four hours to work on it. So make sure you allocate enough time. The midterm is going to be on February 13th and the final is going to be on 27th of March. And then the same process. So the final is open for one week and then you, but you have to do it in one setting for four hours. Other important deadlines. Enrollment will close into any 3rd of January. You're already enrolled, so we don't have to worry about that. But verification closes at the end of January and the 30th. So if you're planning to verify, make sure you do it before the deadline. Another important point, if you want to verify, you also want to make sure you have ID verified ahead of time. It may take a few days, so make sure you do that. You give it enough time. We also want to point you to Slido. So as you see, we're using Slido for all of the live events from now. So make sure you are familiar with different areas. Figure out, explore the questions area. Submit any questions. We'll be answering them at the end of this live event. Yeah, let me just say one thing there. So you're responding to the polls. We have about 280 people, which is a good, great number. Great, glad you guys are here. And so you will post a bunch of different polls and you respond to those. But you can also go to questions, enter a question. And then also when we haven't moderated, so we'll push those out. And you can also upvote the questions that you want answered as well. So what we'll do towards the end, we'll start answering the questions as many as we can. And so we were relying on you guys to go in and vote, which ones you'd like to have answered first. So we'll start releasing those from moderations into the into the mainstream so you can start seeing those. But we'll try to answer those questions towards the end. And the questions we don't get to, we'll try to reply to afterwards because with two hundred and ninety, almost three hundred people on, I'm sure we're going to have more questions than we have time to answer. Sure. All right. So we have a poll for you guys and what topics in the course interest you most. So the general the high level topics that we're going to talk about are forecasting, inventory management, warehousing, transportation, management, just answer which one of these makes you most excited. And so for the forecasting, what really means is demand forecasting. And so you're trying to forecast how many people will buy or how many items will I sell of this skew stock keeping unit or this? What will the cost be of something going in the future? Inventory management is essentially how much of each item should I stock and where how frequently should I replenish it? Warehousing is more the physical. Where do I put it? How do I access it? Where do I put it away? How do I fulfill orders? And then transportation management is all about getting things from A to B. How do I ship things from my manufacturer through my DCs to my stores? Do I use my own transportation? Do I use bicycles? Do I use trucks? Do I use blimps or hyperloop? So all those kind of questions. So these are the fundamental questions when you talk about logistics, kind of the physical side of the supply chain. And so as we look at some of the responses, it looks like, wow, forecasting is winning. That's interesting. Forecasting is having a big revolution right now. There's a lot of interesting stuff coming in on machine learning, trying to understand, you know, soft skills and a lot of looking at social media to try to understand trends and everything. So we'll give you the basics here. That's great. That's a that's the first thing you're going to hit in weeks. One through three is it is forecasting? One and one and two. So then then inventory management, that's great, because everything you'll see ties into inventory management warehousing. Not as much. We only have a small section on that and then transportation, which is my area. So I I'm a little disappointed that wasn't the most interesting one. But when I'm done with it, it will be the most interesting. You'll love it. Everyone loves a truck. All right. So all right. So we are going to now explore individual topics that we will cover in the course. And this is going to be very exciting guys, because we have a set of real problems and real industry situations that you will face. And then we will say how what you learn in the course is going to help you address these problems. So I'm going to have Chris take over from now. Yeah. And yeah, please. OK, so yeah, so I'm going to use it as this case. And the scene up put most of these together is a great case. And everyone I assume has heard of Walmart, but this could be any large retailer. And this is a U.S. example. But retailing has its own flavors in different parts of the world. All of you guys dialing in in Latin America have usually smaller stores, nano stores, but you also have larger stores as well. But here's the problem we're going to focus on. Walmart, this chain has over 3,000 stores in the U.S. And every store carries about 150,000 different items. And we call those items skews, stock keeping units. When we say skew, that just means an item. So if I have a bottle of water, bottle of water coming in a 12 pack versus a six pack, those are two skews. They're different skews, even though the item itself is the same because it's what you keep in your stock. So the same physical item might have multiple skews. If the label is a little different, for whatever reason, packaging makes it a different skew. So what they have about 150,000 different skews and they've got to match their supply with demand from customers. So they're constantly forecasting that demand and making sure they have enough product in to satisfy that demand, constantly monitoring their inventory and trying to get it to the stores in the most economically economical fashion as possible. And they need to constantly understand the in-going and outgoing flows. That's really the transportation thing. So what you're going to learn in SC1X, in this case, in this kind of scenario, is the first one is segmentation. And segmentation is probably one of the core concepts in supply chain management. No two supply chains are the same. No two products are treated the same. You need to segment what's happened over the last 15, 20 years is companies have moved away from a one size fits all solution to segment their products, segment their customers, segment their suppliers and treat them a little differently. So you can think of this in terms of items. You're not going to treat your inventory management for eggs the same way you're going to do it for ice or do it for box cereal or do it for furniture, right? You're going to segment your products based on certain characteristics. And those characteristics are going to be the speed of demand or how much demand, the volatility of demand, the price, the size, all those things that make it different. And so segmentation is all about segmenting the whole scheme of the products you have or the customers you have and bundling together the ones that are similar and you're going to treat them similarly. So you'll see a company with dozens of supply chains based on their segmentation. The next is demand forecasting. And this is all about figuring out how many will I sell or what is the demand of a certain product? And what you'll learn is there's different ways you can do this and different people in the organization of different desires for what they need to forecast for demand. If I'm in sales, I want to know the total dollar number. That's what I'm trying to forecast the total sales level. If I'm in a certain segment, I want to know how much will I sell and say dairy versus dry goods? And then as you get further down, you want to figure out the demand of an individual item. And then you can think about forecasting demand of an item at a store. And so you can get finer and finer detailed, very disaggregated. And what we'll see is your forecast gets worse as you get finer detailed. And as you roll it up, you have something called risk pulling that kind of blends and makes your forecast a little more accurate. And so we'll talk a lot more about how to forecast those different segments because based on your segmentation, you might forecast things very differently, use different techniques. We'll talk about dealing with uncertainty and stochasticity, which is just another fancy way of saying uncertainty and randomness. So we'll talk about that because that's one of the biggest challenges that we have in supply chains. You don't know what your demand is going to be. And so you have to deal with that uncertainty. And then the next two big chunks that are here, the multi-period models and the single-period models are all about inventory management. How do I manage my inventory? And we'll see one of the primary drivers there is the demand. Is the demand steady state? Is it very volatile? Is it something that I can forecast? Because that'll mainly be one of the determinants in what model I use. So figuring out how to model my inventory to determine how frequently I replenishment. I replenish that inventory, how far out I need to plan for, how much buffer stock or safety stock to have. All those things, we'll talk about very specific different models there. And then transportation. And for transportation, it's all about how can I get a product from A to B at the lowest cost, at the fastest speed that matches my level of service? And we'll talk much more about that. But this is what you'll be doing in supply chain management. This is 90% of what you'll be doing in one of these jobs. If you're in supply chain, you're probably touching one of these areas. Now, what we're not covering is like network design. That's covered in a different course. We're not covering some large scale planning for other things. So there's certain things that are covered in other courses. But this is the heart of operational logistics in supply chain management. So let's start with forecasting. So here's the problem. You know, we talked about segmenting and all stuff in products of different characteristics. And you want to use different methods to forecast. And so what I'm going to do is give you a question. And the question is for milk, how frequently do you think we should forecast the demand for milk? And I give you options in the survey. Should you do it hourly? Should you do it daily? Should you do weekly, monthly, quarterly? So the whole idea of the frequency of the forecast because you can think of different techniques. And one of the major series of techniques we're going to teach you a class is something called time series. And time series is a great method if you see repeating patterns. So if you see stuff that kind of has a common pattern, whether it's seasonality or trend, then you can use time series. However, you need history. So if you have a new product, you can't use time series. So that's an example of where you segment and use a different modeling technique for your demand planning. So now for my survey, so what do you think? So, you know, what would you do for milk? So for forecasting, the survey is coming back and saying about about half of you are saying you do it on a daily basis all the weekly. And then the next big chunk is the weekly basis. Well, let's let's talk about the extremes because you're going to see most the answers for this for most of these questions are it depends. An hourly basis is probably a little too fast. Now, if I told you you were at, say, Starbucks, you might be monitoring that much very closely. And in fact, a lot of Starbucks, if they run out of milk, they'll go to the local grocery store and buy it to bring it in because, you know, you can't run out of milk at a coffee shop. But for here, I would go with a typically it's forecasted weekly. You might have a different surge for daily, but it depends on the situation. But definitely I wouldn't go the extremes, the hourly or the monthly or quarterly. So it's something that you're going to have replenished. So let me give you another one. And this is for bedroom furniture for a lot of these Walmart superstores, they'll sell furniture as well as groceries. So now I'm looking at bedroom furniture. And so how frequently do you think you should do a forecast for this? And that's that's the question we want to go. And so you'll see no one's going hourly. That's good. That's good. And so it looks like the common answers are coming in and they're just on the opposite side, they're much longer, monthly or quarterly. I think that's fine. I would go monthly myself, but something where it's longer term. And so you have to ask yourself, why? Why is milk forecasted, you know, weekly or daily? And then why is furniture modeled or forecasted so much longer term? And you can think about some of the reasons one of the big ones is perishability. You don't want to have milk sitting there for a month. Although there is some of that milk that sits on the, Europe has a bunch of these. You're right with the boxes. Yeah, long lasting milk. It's disgusting. Recently someone found a very old, years old McDonald sandwich in their pocket and it was intact. So some products last longer, depending on how much. That was you, wasn't it? That was you. Yeah, okay. That's funny. But hopefully so the simple little question, you know, how frequently do you forecast? You can start thinking about it. It's the characteristics of the product, segmentation. What other things do you think you'd forecast on a daily, weekly basis? Well, do you think of everything in the refrigerated areas that need to come in? You need to keep track of that much more frequently. That they're more fast movers versus the furniture, you know, that doesn't move as fast. And so you can think now, just a general idea, what are some of the trade-offs you're making for segmentation and the different techniques you'd be using? So this was a really key point, trade-off. So this is like at the heart of a lot of the operational decisions that we make, we need to understand the trade-off. And by that we mean how different forces are working against each other to move the optimal decision to left and right or determine our future path. In this case, for instance, we got to know how the demand is, how much is it too expensive to keep it in the stock? Right. How big we can order? Is it expensive to order? How frequently we should order? And all of these forces work against each other. So you will learn how you could use the specific mathematical approaches to figure out what's the optimal point to strike a balance between these opposing forces. Yeah. So then, so the forecasting feeds directly into how you're going to manage inventory because it's giving you not just what your expected sales are, but a range, right? So hopefully you get a range forecast. So that's going to fit into your inventory model. And so the problem you're going to have here is you have, and I grouped this into two groups. Right now, those products that are kind of ongoing sales, it's not promotional. It's things that are going on steady state. And you're going to have to answer questions. What is my forecast, which we did with demand forecasting? How much should I carry? How much should I order? When should I place it? Also, where should my inventory be? Should I keep things in the DC? Should I push it in the stores? How do I stock those things? And so we want to ask the same kind of question for frequency. How frequently do you think you should reorder, in other words, replenish things like breakfast cereal? And so I set up a poll here. And so for an item like breakfast cereal, how frequently do you think you should place your orders? Because what typically happens, the retail store, they sell to customers. They place an order to the DC, the distribution center, and they replenish the store. The distribution center places orders to its larger distribution center or manufacturing plant, so you can see it going up the supply chain. And then the product goes downstream to the store and eventually to the consumer. So how frequently do you think a store should reorder breakfast cereal? And so I gave you, it was hourly, daily, weekly, monthly. And it looks like the dominant is weekly. That's typically what happens. Actually, it depends, what a lot of stores, I know Walmart does this, Target does it, different retailers, they will have, depending on the store, the size of the store dictates the frequency of replenishment. So you might have a small store that gets replenished once a week. You might have a super store that the amount of volume going through, they might have three reloads, replenishments a week and some will get replenished every day. It really depends on the flow. But what's interesting is it might be not a full truckload of a product, it gets mixed. And so you might have cereal in there with dog food, in there with other things from across the store, that gets mixed in the DC, the distribution center, and then gets delivered to the store. So that's kind of a combination of the transportation system. Can you manage a transportation system that makes that final delivery to the store really inexpensive? As an example is a project we did with Walmart about three or four years ago. Think about a grocery store, you've got the ambient temperature area and that's everything at room temperature. Then you've got things that are refrigerators, the milk, butter, cheese, things like that. Then you have a frozen zone, like ice cream, ice, frozen dinners, things like that. And typically, traditionally, you'd have three separate trucks would deliver those. What they started doing, they'd have a truck with three compartments and you could change the size of each one of those compartments so you could have one truck was delivering like a third of ambient food, frozen and refrigerated. And so what that does, it allows you to have more frequent delivery to a store because if you don't have to wait for a full truck load of frozen goods to justify that delivery, it can be a partial. So think about how these different aspects, how transportation enables you to be more frequent in replenishment for your inventory and if you're able to replenish your inventory faster, your forecast doesn't need to be as accurate. So all these things tie together, which is really, really kind of at the heart of supply chain. So let's do another one. Let's go to furniture office chairs. So how frequently do you think a store should reorder, say office chairs is the one that I put here? And I'll give you guys a couple of seconds for that. And so this is at the heart of it when we're gonna talk about in this course is the idea for inventory. A lot of it is known as replenishment policies. What's your inventory replenishment policy? And it's simply when do you order and how much? And then, and it's really ties into how much, how accurate your forecast is, how much safety stock you need, what's your transit time is to get replenished. All these things fit together to deliver that one answer of how much to order and when to place that order. And these are key decisions in business. And small changes could mean millions of dollars difference at the end of the year. All right, most of you guys are in and everyone goes to month and you're kind of catching up on this, right? You'd probably don't need to order it as frequently. So you'd have probably a slower cycle for that because chances are in your distribution center, you might have a, let's say you have a Walmart or a Superstore, it's being served from multiple distribution centers. Probably one that is just the groceries. You probably have another one that's delivering for a different other segment, like the furniture might come from a different one because they will segment their whole supply network based on the type of products moving through, whether it's a fast mover or whether it's something that's really slow. And by fast and slow, I mean the demand, something that's demanded thousands of units every day versus once every quarter. And you have a slow mover like this office chair, probably not selling 100 of them a day, right? So you're gonna kind of separate those segment, your network a little bit and supply those in a different, more cost-efficient manner. All right, well, the next question is tied to this. We can go to the poll and I asked a simple question when you're managing inventory for individual items, is it better to have too much or too little? Because obviously you won't have just enough, right? We all wanna be Goldilocks, right? Right in the middle, but you never will be. So my question is, is it better to have too much or too little? I shouldn't have put the depends in. That just makes it too easy. You know what? I'm gonna, because I can, I'm gonna edit it and I'm gonna get rid of the depends. You guys have to choose now. Yeah, I'm forcing you to make a decision. So let me do this one more time. I'm going to reset the results. All right, let's do it again. Okay, it's live. There we go. Is it better to have too much or too little? I gave you a fence to sit on. I didn't want, I didn't mean to do that. And so you guys are coming in and this is the critical question. And what's interesting is it depends on the company a lot of times, but it's not symmetric. And I'll let you guys, we're about 150. I'll give it a couple of seconds more. And it's kind of going neck to neck. Yeah, it's kind of fitting what I thought it would be. So it's running about 50 to just over half is saying it's better to have too much inventory. And then 40% is saying it's better to have too little. And then 8% is saying it really doesn't matter. All I can say is the 8% you guys are wrong. It matters. And then, you know, which way it goes. That's a question that you want to figure out. And the joke is if you have too much inventory, right? You might not get your bonus because you have, if you have an extra inventory that's money that's sitting there because you have a holding costs, right? And so that's money you're not spending somewhere else. But if you have too little and you stock out you tend to get fired. So for someone an individual, individual will tend to overstock. They'll have too much inventory because they know they're really protecting their job. And because no one gets fired really for having too much inventory. You just don't make your compensation bonuses. You might not earn as much money. But that's not optimal. So there's this whole field that looks at biases of individuals that would push decisions away from the optimal point. And you will, one of the things we'll do actually we'll give you the main important variables that you should measure and put into a model and determine what's the optimal level I have to order such that the extra cost of the cost of excess balances out the cost of shortage. So it's important to be aware of our own biases and decision-making as well. Yeah, and so it's really a situation. And so what I ask now for this polling question is a, this is a word cloud question. What do you think the most important things to consider when setting that inventory level? You know, to have too much or too little and enter in one word that you can enter in multiple words, but one at a time. And then so we'll create a word cloud out of this and you guys should see this. Let's see, can we, we can't see it. I can only see an admin view. But you should see how the word cloud comes out. And so demand is coming out to be a big one. Yeah, there's other things that are critical there as well but the whole idea of having too little, having too much, it's really a fundamental trade-off. And it's even more important when we talk about another type of inventory modeling. And that's where we're looking at something where there's only a short selling period. We'll talk about that in a second. But I think you guys are getting in there pretty, pretty good. Some of you are having a hard time understanding what one word means, but that's okay. We'll get better at that. But yeah, it looks like demand costs you. So you're getting the right ideas. You're getting the right ideas. Awesome, awesome. So I look forward to seeing what this word cloud looks like. All right, let me submit something then. All right, we have it. So let me actually make it full screen. And then we could show this to you guys. Yeah, they probably see it as well. Yeah, there we go. So demandy has the big one, but some other ones in there, variability, awesome. That's actually such a critical one. You guys put in there the variability of the demand. The joke, not the joke, but the saying in supply chain is the variability kills. If I tell you what the demand is, the price, no matter what it is, and with no variability, you can design a system. As soon as you introduce variability of demand, of supply, of price, it just makes it hard. And that's why we all have jobs, right? To manage that variability, because variability kills. All right, let's keep going because we're already at 37 minutes in. So I talk about multi-period. And that's where you're gonna sell if you have a little excess inventory at the end of one month, you'll keep in yourself the next month. But there's a lot of situations where you only have a certain sales period. And so you only sell them during this short period of time. And the orders have to be placed ahead of that time. And you don't know exactly what the demand's gonna look like. You can't replenish during that sales period. And any excess inventory you have at the end of that sales period you gotta get rid of. Usually at a loss, you might have some salvage value, but usually you just have to get rid of it. And being short of inventory leads to lost sales. So if you're short of anything, you lose that sale. And so the question is, in this case, the single period also called the news vendor. Used to be the news boy, but we're politically correct now. The news vendor problem. And so my polling question, let me get to that, is which of the items, and I have them up here on the screen, which of these items should be managed using the single period inventory model? Because we'll show you how to do this model and it makes a trade-off of the cost of being too short and being having too much inventory. And so the five items that I gave you were Christmas trees. And then in the top right, that's Tom Brady, but we're not selling Tom Brady's. We're selling NFL football jerseys. And so these are things that fans will buy. And if you're up here in New England, you will own at least one Tom Brady jersey that you can buy. And beneath that are disposable diapers. This is Pampers by Procter & Gamble. Beneath that are newspapers. And then to the left of that are high-fashion shoes, high-fashion women's shoes. So the question is, which of these items should be managed using a single inventory period model? And I'm letting responses come in. You're having great response on the surveys guys, great ground the polls. So 92% of you, and you can answer multiple times, of course, if you think two of them are, you can say which ones. So 90% of you are saying Christmas trees, absolutely. The best time to buy a Christmas tree is the day after Christmas, right? Because they're cheap. So that's the thing, it's a very short time period. And so you have to decide how many trees you're gonna bring in to sell and you need to sell them during that time. Anything you have left over, you're gonna burn. And if you run out, you don't have enough time to bring more in. So it's a classic example. The next one, newspapers. It's called the news vendor problem. You guys picked up on that. No one wants to buy yesterday's newspaper. Actually these days, no one wants to buy anyone's newspaper. Everything's online. But that's why it's called the news vendor problem because that's where this problem was first studied. I have to go out and buy newspapers and I'm selling them on the street. And I don't have enough time to get any more after I get my initial allotment. Fanned NFL jerseys. Interesting, this is the case. We'll use this when we talk about it in week seven. Is this week seven? Yeah. And it's actually is managed as a single period problem because here's the situation. It's really interesting. So you have these jerseys that are made typically overseas and they've got to be ordered way in advance. And the demand for jerseys very much follow how well the team and that individual does. And you don't know how well that team or that person's gonna do well in the season until the season goes. But you've already had to place your order. So you actually treat it like a news vendor problem. And so we'll go into much more detail there but it's a really interesting application but you'll manage those fashion items, the jerseys, as a single period. High fashion shoes, same things. For all you women on the call, you know when fashion season hits. Things are in for about six months and then they go away and they get marked down. And so you manage these, especially high fashion in single events because you know the selling season is gonna be very short. High fashion items are like milk. They're perishable, right? The value goes down. Milk loses its value because it becomes fresh and it gets spoiled. Fashion is perishable because the value of it goes down the longer it sits on the shelf. This is why things, you have outlet stores, right? This is what Zara, if any women on the call know what Zara is, they are masters at this. Interestingly, the one that you guys said the least disposable diapers, these are always managed this way. And you might wonder why. I mean diapers, pretty constant demand. Babies don't have seasonality, right? They do what they do but it's the way they're sold. Mainly in the US they're sold as promotions. And so a company like Walmart will work with a company like Procter & Gamble and say, hey, we're gonna have a two for one sale this month for this week on Pampers in this region. And then they know the demand will go up. And the question for P&G is how much more, how many more pallets of diapers should I sell that send to Walmart that they sell within that period because they're on sale for that one week and then they go back to the normal price. So we did a large project with this, specifically with diapers because it's one of those things that a retailer will use to generate traffic because you get someone into save money on the diapers and then they're also gonna buy the milk, the bananas and the other things. So it's interestingly diapers and some other promotional items, that's how they're sold so you treat them as a single period model. Kind of interesting. All right, I think the last thing we've got is transportation. So here's the problem with the challenge what we have for transportation is you don't, things aren't made where they're consumed, right? There's always a separation, the tyranny of distance, right? And so if I'm a retailer, I'm Walmart, most of my products are made elsewhere, usually across the world. And so how do I get that product from its manufacturing through my whole supply chain to get to me so I can send it to my stores? You have different modes of transport. Generally you can think of things that go in the water, things that go in the air, things that stay on ground. But then within that, there's different types. Think about last mile like parcel delivery, whether it's DHL, UPS, TNT, FedEx, versus say a large trucking company. So if I wanna ship just one pallet or one item, I'm gonna have a different way of transporting something if I ship say a full truckloader, 20 pallets. So you have all these different ways of figuring out how do you get product to my final store? And so the question, oh, and the interesting thing here is that the assets for transportation are typically not owned by the shipper, by the company that's managing the inventory. Now Walmart, they buy about a billion dollars of transportation, truck transportation a year. They also have their own fleet, but most companies don't have their own fleet. Many do, but almost every company usually buys external assets. In other words, they work with another company that is known as a carrier to provide that transportation. Europe's the same way, Asia's the same way, because you have specialty firms that just provide trucking services and a retailer or manufacturer will contract with them. And so my question for you guys is which mode is better? Having a low cost, but it takes a long time versus a high cost with a short time. And you see this trade-off all the time. Think about shipping things from China to Europe. Is it better to fly them? That would be a high cost, right? And a short time. Or to send them on, say, Maersk has a daily shipment that goes all the way through and delivers on the water. It takes a lot longer, two and a half weeks, but it's much cheaper. And then you even have a third option there where you can go in and the Silk Road and you can go west and rail through Kazakhstan and Russia and then come in and that's somewhere, even in the middle. So the question I'm asking you, which is better? Cost or transit time? And so the options are low cost, but long transit, high cost with short transit, and then it doesn't matter. Okay, the only answer that's wrong is that it doesn't matter. Okay, it always matters. It always matters. It always matters. But why does it matter? It all fits into the product and you're gonna segment. What's interesting, like Intel, they make chips. Up until about 10 years ago, chips would cross the ocean half a dozen times because they'd do something in one plant, fly them, do something else. And that was fine because the margin was tremendous and you didn't want them sitting still, right? So you wanted to move them as fast as possible. Who cares about the costs? Now as chips going into PCs became chips going into laptops and now into phones and tablets, the value in the margin has gone down, their commodities. So now what are they doing? Shipping them on ocean, using trucks. So as the value of something gets lower, inventory, you're gonna tend to use a slower mode because what it really turns into as a product's value increases, the cost of keeping it there increases. So you wanna move it faster. So it's a trade-off there. And so the real answer is, it depends. And that's why I took that answer out. But again, it's that trade-off because you'll typically, even in something like you have a store where you have a new line coming out and you don't know what the demand's gonna be. Say it's shoes coming in, you have the new shoes coming in, you might fly in the initial stocking of it for like a two weeks worth and then see how the sales go initially and then send the replenishment by ocean. So you can use both of these modes strategically. And so, but the real trade-off is on the value of the item being sent. So it isn't always low cost but long transit because you wouldn't wanna send your milk that way, right? You wouldn't wanna send your iPhones, don't tend not to go in a boat, right? iPhones will fly in the air, they'll go first class because they're small, they're light and they're high value. If I was gonna ship bricks, low cost, put them in the boat, right? So that's, you'll see that trade-off. What about toilet paper? Toilet paper, I wouldn't ship that far because it's bulky, right? It takes up its low value and it's something that I would probably produce domestically as much as possible. Like beer, beer can be shipped but you'll see most breweries, they try to produce local water, soda. They will try to produce local because the transportation cost is so high you're shipping water around. So for like toilet paper, you're shipping air because you can only squeeze it so much. There was a story that, it's interesting, products that you may have an optimal choice for in the usual time may become an urgent product. So there's a story that US military ran out of toilet paper and you could imagine how what a chaos it's gonna be. So there was a case they flew toilet papers but that's really rare. Yeah, that's probably pretty rare. So why don't we go into the last slide? There we go, one more. All right, so tying it together. So hopefully we gave you a flavor of what this is and you'll be using models to make those trade-off decisions. This is MIT, we're gonna use mathematical models. Hopefully you're comfortable with Excel, with making trade-offs. It's really kind of, it's not intensively proof oriented and if you're struggling, best to raise your hand in the description form early. Let us know and we have recitations, we'll get you going. But there will be math in this. But you're gonna see segmentation and mainly segmentation on how to handle uncertainty. That's like a common theme you'll see across everything and then you'll see the three big chunks. Demand forecasting, inventory management, transportation planning and the thing you need to keep in your back of your mind they're all related, right? As my forecast gets better, I don't need to stock as much inventory. As my transit time gets longer, right? I need to stock more inventory because I have to control over a longer period of time. So they all are levers to determine how much inventory I need, how quickly I replenish and where. But the key learning is trade-offs. And this is what Sina said earlier, that's what this course is all about. And it's a trade-off between cost and level of service. You'll see this term a lot, LOS, level of service. So I'm willing to spend a lot more to make sure I stock out 1% of the time at most or do I care, do I not wanna spend as much? I don't care how much I stock out. A fixed versus variable cost. You'll see this when we talk about the economic order quantity and then shortage costs versus excess costs. That's that news vendor problem. You'll see this explicitly. Is it better to have too many jerseys left over or to be a little short sometime? And it really is a trade-off between the different costs. So that gave you a flavor, I think, for some of the costs that we have here. And then I'll turn it back to you, Sina. We can start answering some questions. Awesome. Thank you very much, Chris. So you guys can post your questions as you've been doing. Yeah, we haven't been moderating them, my bad. And then go ahead and vote the questions. We will try to answer them in the order of the votes they have. So... Okay, so I'm putting these out there now. And some of these... All right, one question is, how does this course work? So please just review week zero again. We have extensive information there. Is it possible to pay after the course end? No, there is a deadline for verification that we just talked about. You need to move those over. So just want to answer the really simple ones first. All right. So going back to the ones you are seeing, I'll start with the top one, Jason Reeves, asking, beyond reviewing the corresponding key concept document, do you have any suggestions for those of us who have not yet taken zero X? Well, one important thing is, you can go back and review zero X content as you see appropriate. So when you're taking the course you have a problem, say, with a specific model and then you could go back to zero X and we might be, have we decided to, with the self-based yet? Yeah, we're gonna, we'll announce this later. For most of you have not taken SC zero X yet about some of you have. We're in the process of turning SC zero X to be an on-demand course, as opposed to SC one X where we will be with you every week, products and things get launched every week when we manage that. Zero X, we think is like a reference course. You'll be touching different paces of it during your whole time taking these courses. So it's gonna be on your own pace. And so SC one X is gonna predominantly be the entry course, because that's where we talk about the basic concepts and then SC zero X will be on-demand. But you don't need to take them necessarily in sequence. We recommend it, but we don't require you to but you have to take them all before you take the CFX to earn the MicroMasters. So the SCS courses are kind of equivalent to the first semester of the blended master program. So all these courses are done in one semester on campus. Which the, which question? The SCX courses equivalent. It's equivalent to, it's essentially 42 units, which is equivalent mainly to the first fall semester at SCM. That's how we designed it. So that's why the blended program, they come in, well, the residential program, the 10 month they start in August and they finish in May. So they have an orientation in August, very intensive period. Then they have a fall semester, a January term, which they're doing right now, and then a spring semester. The blended students, they essentially take credits and they don't have to do the orientation or the fall semester, they come in in January, they do the IAP, the January term when we have all the scale students here and then they do the spring. So what they take online are all those fundamental courses. So it's equivalent to that first semester. All right, Katie is asking why verified numbers are lower than enrolled. Well, of course in online courses, we have a lot more people just enrolling as audit to learn and we are happy to offer those. This is one of the main goals to offer free education to everybody. Yeah, the big thing it's free. You can take these courses for free, but if you want to have it get the credential, you need to take certain exams, you have to pay $200 and there's a reason for that. And we encourage you to become verified. We find that verified students stay with the course longer. They're a little more dedicated. They do better and they tend to have better results in the long run. So by putting some skin in the game and it's $200 is not a lot of money for what you're getting for the value. You get access to other materials and then your examinations, your assessments will be made because if you're taking it for free, you can see all the videos, you can see all the practice problems, you get all those kind of materials, you don't have a mid-term or final because that's a little more rigorous. And so we do that for the verified. And no word of the assignment. Right. Our live sessions are recorded. Yes, you can later watch it on YouTube. We'll share the link. After someone earns the MicroMasters certificate, does MIT require to take GRE score in order to apply for the campus SC Master program? So once somebody earns this credential, do they also need GRE? I think... For the blended program, they do not. They do not. You do not. In fact, we have waived it for some people. So doing well in the SCX courses do a couple of things. One is it really proves that as opposed to the GMAT or the GRE where you're learning skills, showing that you can do math skills, doing well on these courses shows you can do these, have those same skills in this domain, in our supply chain space. And if you come to MIT, having earned the full MicroMaster or even one or two of the courses under verified, you can waive those courses. So even if you wanna come for the 10 month program, it's very valuable to take some of these courses. In fact, this year about a quarter of the class that came for the full 10 month program have MicroMasters. They said, okay, I got the online learning. I have the credential. I could do it for blended, but you know what? I'd like to spend the full year at MIT. I know it costs more because you're paying for a full year, but that way I get to spend more time on my research project. I spend more time on my career development. So you have all of those different things you can consider. Typically the younger students tend to wanna spend longer time. If you're in your mid 30s, you got two kids, you know, you're working, you know, spending one semester, that might be all you can really spend. And that's the option for you. But if you're just kind of doing a career shift or you're kind of thinking about what you wanna do, the 10 month program, it's a slightly different, a longer program. It gives you more time. Awesome. Not taking zero X before one X. Again, it's your choice. If you feel like you're comfortable with the material, it's okay, but it's recommended. As a verify learner, I appreciate the reading. Supplemental, okay, can I have more masters, doctoral CCs to read? Yeah, you can actually, you can go to every single thesis that's been published at MIT, is it called DSPACE. So if you Google DSPACE, MIT, and then look for the SCM, Spice Management category, you can search on key terms. Now at MIT, I can print those out. For anyone anywhere else, you can give them online. They're PDFs of the CCs. So yes, you have access to all those. We try to give two or three, or we recommend a master's thesis for each topic during the weeks. I think we have a lot of those in SC one X. Yep. Can I take credential without zero X? No, you'll have to pass all five courses. Yep, yep. Hello, my beloved teacher. Oh, if I completed all courses in SCX, is it enough to take an entry level job? What's the department of the firm I can work? Oh, you can go all the... We're gonna cover... So what we're doing is kind of giving you the basics. And so you could work in a forecasting area. No matter where you go, you're gonna go deeper, right? So we're gonna teach you time series across the methods. We'll do some, we'll give you a handful of forecasting tools you can have in your tool belt. When you actually go work in a firm, you're gonna go a lot deeper into that. You'll probably, they probably have a specific tool they use. So you might have to go deeper and understand that. What we'll do is teach you the fundamentals that make you valuable and attractive to anywhere in the supply chain. So you know that the common terms, the trade-offs being made, you know the fundamentals, and then you'll learn the details of each company's specific operations when you get there. Yeah, so basically, I would say any position that's operations management or supply chain management, you're very well positioned for that. The courses are higher level than undergrad. So we treat everything at the graduate level. So you will learn almost, you know, state-of-the-art tools. And it's gonna be very different area. So for instance, if you're at Walmart, you could work at the planning of inventory. You could work at transportation. You could work at the last mile delivery. You could work at the headquarters and design algorithms and everything. So there's tons of, supply chain is a very big area. So tons of opportunities. So... I'm just pushing a bunch out. There's hundreds of questions. You guys are very questioning. Lots of questions. This is great. This is awesome. I'm willing to stay for a couple more minutes and see any last ones. Are deep learning methods being used in demand for us? Yes, we're not gonna cover them. What we'll do in SC4x is go into some machine learning and we're adding more to that each time we run. And that's where you'll go into some more techniques. What we'll do in 1x are the fundamental traditional tools that are being used. But there's a lot of deep learning and stuff going on right now. It's very exciting. In fact, we're seeing a lot of theses that are trying to apply different techniques here. So that's a good area for a research project. It's not established enough to be taught in a SC1x type course. How to join the bootcamp? I think we can send the information in the next newsletter. That's a great question. Question on inventory. How would you predict the forecast if you are a startup? Basically, if the product has no... Yeah, so we cover that in week three, two, three. I know we do it. New products. The whole idea of new product introductions. It's its own art form. And so the big, the short answer is you look for a look-alike as much as possible. But there's some other techniques and we'll cover that in the first couple of weeks of the course, because it's a huge problem. Yeah, Chris has a specific section on that. For the Khan Academy questions that Greg has, that's the next one up there, right? Which sections? You know, it depends. Some people... So when we do EOQ, Economic Order Quantity, that's where you're making a trade-off between fixed costs and variable costs. And you're actually using differential calculus. You don't know you're using differential calculus, but you are, because you're finding an extreme point on a convex function. And so sometimes people want to refresh themselves on what a first derivative is, and they'll go to that area. When we talk about forecasting, we do causal models, which use regression. And sometimes people say, oh, I'm a little fuzzy on ordinary least squares regression, so they go and check it there. So the sections of Khan Academy, it really depends on your background. Some people are weak in different areas. Also, this is why we're making SE0X kind of an open-ended reference course and keeping that open. Because we'll find that people, when we do get into forecasting, they might want to go back to 0x and look at the regression section, make sure they understand it. So it really depends on what your background is. So we are past the one hour mark. But if you'd like to take a quick look and... Yeah, why don't we go to there? And so we'll try to respond to all of these. And we should have given more time to responding to this more for answering questions. I guess I'd talk too long about my own case. No, this is great, guys. Thank you very much for lots of questions. We'll look at all of them and answer them later. Excellent. Perfect. Thank you very much. We really appreciate you joining us today. We're looking forward to have a great journey with you. Use the discussion form. We monitor it constantly. Try to stay active, form local study groups. Have fun with this, guys. I'm looking forward to it. Thanks, Tina. Take care.