Elton Oil: Managing Supply, Demand, and Delivery in Senegal

by: Noel Watson, Diana E. Páez, Alassane Fall

Publication Date: October 31, 2019
Length: pages
Product ID#: 8-600-079

Core Disciplines: International Business, Operations Management/Supply Chain

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Teaching Note

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Description

Elton Oil, a petroleum products company operating in Senegal, owned and operated 26 diesel/gas stations across the country and purchased diesel and gasoline from Senegal’s only refinery (SAR) or imported when necessary. Elton Oil was both a distributor and retailer of oil products and its head of distribution was responsible for planning the timely delivery of products to the gas stations. However, in the case, these duties are being temporarily handled by the export manager. Unfortunately, while filling in for the vacationing head of distribution, the export manager is faced with an unexpected 30% drop in supply from the country‚Äôs refiner.

Students are challenged to schedule deliveries to groups of Senegalese gas stations given constraints on storage, distribution, and supply capacity using a Microsoft Excel worksheet as a decision support tool. (This case is also available in French.)

This case was written and published with funding support provided by the Bill & Melinda Gates Foundation.

Teaching Objectives

After reading and discussing the material, students should:

  • Recognize the value of looking at inventory levels in terms of days of supply, especially in dealing with points of sale that have varying demand levels.
  • Recognize the value of time when delaying inventory decisions, especially given the critical information that can be revealed during the delay.
  • Recognize the value of decision support tools within logistics for dealing with difficult logistical problems.
  • Recognize the reality gap that may exist between the problem that a decision support tool addresses and the real-life problem to which it is applied, and understand how to manage this gap to lead to overall good outcomes.