Integrating student projects with real‐world problems: the case of managing commodity price risk

Abstract

PurposeIn this article, the authors aim to describe an approach used in a purchasing/supply management course at their university that provides students with a realistic, problem‐based learning experience with client involvement while maintaining consistent learning outcomes and a manageable faculty workload term after term. Students use a standardized approach to assess commodity price risk and decide upon an effective risk management strategy. The specific commodity that students analyze is selected by client companies who then actively participate in the course.Design/methodology/approachAn illustrative case is presented describing how universities can partner with companies to integrate student projects into the curriculum using a standardized, repeatable process.FindingsThere are numerous benefits obtained for students, faculty, universities, and companies when engaging in commodity price analysis and risk management projects. These include the applied learning for students, providing new insights to companies, networking opportunities for students and companies that may lead to hiring, fostering closer relationships between universities and companies, providing research contacts and opportunities, and ensuring that the course is repeatable each semester.Originality/valueThe authors' approach capitalizes on the realism of client involvement while reducing the variation in learning outcomes and increased workload introduced by doing different types of client‐based company projects each term.

Client-Based Cornerstone Design Projects

“…Project-based learning combines the typical engineering theory subjects with hands-on building and prototyping [1], [2]. Benefits of experiential learning include increasing understanding, knowledge application and integration [3]. These projects also have the goal of promoting teamwork, design thinking and creativity by combining the theoretical and practical [4].…”

“…" [C]lient-based projects can serve as a bridge between the academic and workplace worlds." [5, p. 132] For many universities, project-based learning has evolved to incorporate industry in academics via client-based projects [3], [7]. The projects benefit the students as well as the client.…”

“…Client-based projects are typically done in capstone projects [2], [3]. Partnering with industry is less risky in this case because the students are more mature, have more knowledge and have a better chance of success in their project.…”

“…However, as Zsidisin, Hartley and Collins point out, if these projects are not properly managed, "students and clients will be dissatisfied." [3, p. 390] There are many challenges with client-based projects, including finding a client willing to participate and share, identifying an appropriate scope and fitting the project into the learning objectives of the course [3]. These challenges are compounded in cornerstone design courses because the abilities and knowledge of the students can be limited.…”

Improved forward buying of commodity materials

“…In a competitive market, the profitability of these types of finished goods is sensitive to commodity market price fluctuations. In particular, if the market price of a commodity material increases, firms' profits often suffer when the business conditions preclude firms from passing on the increased costs to consumers (Zsidisin et al, 2013). This precise scenario has impacted numerous firms as the volatility of commodity markets has increased in recent years (Cohen and Kunreuther, 2007).…”