What does a game of chess have to do with supply chain management? More than you might think, says Luciana Echazu, an assistant professor in the School of Business, who teachesIndustrial & Supply Chain Economics. The innovative new course is required for undergraduates majoring in Global Supply Chain Management at Clarkson. Making smart supply chain decisions require the same kinds of strategic thinking you need to win at games like chess. And, in fact, Echazu has made playing chess and other strategy-based games a key component for learning in her class.

"I want all of my students to learn to think strategically," explains Echazu. "And often an effective way to introduce them to the logic they need is to begin with a game. It really gets them into the right frame of mind." Tackling the complex challenges that can arise in the supply chain typically requires students to apply mathematical formulas, so calculus is a prerequisite. "But solving these kinds of problems," she observes, "is really an art."

Echazu's expertise in game theory, a branch of mathematics that deals with strategic thinking, has blended well with specializations in industrial game_sidebarorganization and behavioral microeconomics in teaching her Industrial and Supply Chain Economics overview course.

Since supply chain issues largely involve interactions with other firms, especially partners and competitors, she points out, managers must address these relationships strategically to make the most rational choices. "Game theory is about trying to anticipate the actions of your opponent. We study a variety of games from inconsequential ones like rock-paper-scissors to others having to do with political science, wars and markets. Some have a probabilistic component." She introduces every new topic with a modeling game that simulates the kinds of logic and behaviors involved.

Bottom-line Economics

In exploring supply chain topics, Echazu always frames the decision-making process in terms of bottom-line economics. "Managers need to understand what to focus on," she explains. "How partners establish powerful relationships along a chain. Implications in setting capacity. How much to produce. How much inventory to hold.  How to control quality." She places these issues in the context of corporate basics ranging from cost structures to profit functions to the nature of an industry. In a final project, students analyze an industry from the perspective of all topics addressed in class "and really see the application of the mathematical models they have learned."

Echazu earned her B.A. at Universidad del Salvador in Buenos Aires, Argentina; her MBA at East Carolina University; and her M.A. and Ph.D. in economics at the University of Memphis. She came to Clarkson in fall 2007. "I have been impressed by the high quality of my students," she says, "especially their willingness to work hard without complaint in a class that is very challenging."