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Iris Heckmann

Towards Supply
Chain Risk Analytics
Fundamentals, Simulation, Optimization
Towards Supply Chain Risk Analytics
Iris Heckmann

Towards Supply
Chain Risk Analytics
Fundamentals, Simulation, Optimization
Iris Heckmann
Karlsruhe, Deutschland

Von der Fakultät für Wirtschaftswissenschaften des Karlsruher Instituts für ­Technologie
(KIT) genehmigte Dissertation.

Tag der mündlichen Prüfung: 26.10.2015

Referent: Prof. Dr. Stefan Nickel
Korreferent: Prof. Dr. Francisco Saldanha-da-Gama
Prüfer: Prof. Dr. Wolf Fichtner
Vorsitzender: Prof. Dr. Rudi Studer

ISBN 978-3-658-14869-0 ISBN 978-3-658-14870-6 (eBook)

DOI 10.1007/978-3-658-14870-6

Library of Congress Control Number: 2016945784

Springer Gabler
© Springer Fachmedien Wiesbaden 2016
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Acknowledgments

The pursuit of well-sophisticated solutions, derived from theory and

made applicable in practice, led me to FZI Research Center for In-
formation Technology. At FZI I was given the opportunity to work
on improvements for logistics systems, to learn technical content, to
get to know real-world problems and to experience a fruitful working
environment.
During that time I worked on the topic of Supply Chain Risk which
resulted in the underlying thesis. However, this work would have
not been possible without the support and guidance of others, who
I want to thank here.
I am indebted to Prof. Stefan Nickel for being the supervisor of
this thesis and a mentor to my research work – especially for his
farsighted guidance, his productive ideas, and his sincere interest in
discussing (rebutting or exploring).
My thanks also go to Prof. Francisco Saldanha-da-Gama for being
the co-supervisor of this work – for his calm, his profound thoughts
and his ability to explain.
Thanks are due to Prof. Wolf Fichtner for being part of the exami-
nation committee and to Prof. Rudi Studer for his sincere conduct
as the chairman of the examination committee.
Additionally, I thank my colleagues at the Logistics and Supply
Chain Optimization Group at FZI, the Institute of Operations Re-
search (IOR) as well as the Institute for Material Handling and Logis-
VI

tics (IFL) of the KIT – Karlsruhe Institute of Technology for sharing

good and bad research times.
Priceless support and patient encouragement came from my family
and friends. They all have never become tired to encourage me.
Special thanks go to my parents, who have continuously offered me
a quite and safe place for retreat.
Abstract

Unexpected deviations and disruptions, those are subsumed under

the notion of supply chain risk, increasingly aggravate the planning
and optimization of supply chains. Over the last decade there has
been a growing interest in including risk aspects for supply chain
optimization models. This development has led to the adoption of
risk concepts, terminologies and methods defined and applied in a
broad variety of related research fields and methodologies. However,
for the purpose of supply chain risk management the suitability of
risk, as it is coined in these domains, is up for discussion.
The major contribution of this thesis is given by the development
of a profound conceptual basis of supply chain risk analytics and
the transfer of newly defined concepts for the modeling and opera-
tionalization of supply chain risk within simulation and optimization
approaches.
The first part gives an extensive analysis of fundamental concepts
and approaches that surround research in the field of supply chain
risk management. This includes a review of available concepts of risk
in general and supply chain risk in particular. As supply chain risk
is either ambiguously or incompletely defined the literature review
does not only critically revise existing approaches, but also identifies
essential aspects that drive the extent of supply chain risk. Part I
provides adjustments of commonly used concepts and offers a new
definition of supply chain risk. It is emphasized that it is the re-
sponsibility of supply chain risk analysis to evaluate the interactions
of risk defining elements. Having set the foundation for future ap-
proaches the new concept of supply chain risk analytics is coined.
VIII

Using mathematically based approaches, supply chain risk analytics

is tailored for the management of supply chain risk and associated
sub themes. A discussion of the value of mathematically approaches
in the light of risk-aware solutions and a review of existing literature
within the field of operations research complete Part I.
Consistently following the discussions and conclusions provided in
Part I, Part II introduces a new simulation-based procedure for iden-
tifying and assessing supply chain risks for a given supply chain, de-
noted by SimSCRF. The approach builds on existing proprietary sup-
ply chain planning engines and applies methods from design of exper-
iments to determine weaknesses of the underlying supply chain. To
align the data model for supply chain planning with the simulation-
based representation of a given supply chain, an object-oriented in-
formation framework is presented. The introduction of an additional
layer between planning engine and analysis algorithms offers the pos-
sibility to easily switch between different planning engines and as a
result conduct risk analysis for different supply chain planning prob-
lems. An exemplary supply chain risk analysis is conducted on a real
case supply chain originating from the chemical industry. The eval-
uation provides insights on the existence of supply chain risk and its
extent as well as on potential conclusions for mitigation options.
While the solution approach of Part II is characterized by the in-
terplay of technical entities within a consistent process flow, Part
III focuses on the development of a risk-aware optimization model
for supply chain network design problems. Based on contemporary
research gaps identified for optimization approaches in Part I, Part
III deduces a mixed-integer two-stage stochastic programming model
that extends the capacitated plant location problem and additionally
offers the possibility to formalize and operationalize supply chain risk.
With the goal to evaluate risk-aware solutions the concept of value
of risk consideration is defined. The evaluation of the developed op-
timization model discloses its usefulness in terms of providing risk-
aware solutions and of approaching risk by stochastic programming
principles.
Contents

Abstract VII

List of Figures XV

List of Tables XXI

1 Introduction 1
1.1 Motivation for Beginners . . . . . . . . . . . . . . . . 1
1.2 Advanced Risk . . . . . . . . . . . . . . . . . . . . . 5
1.3 The Real Introduction: The Name of the Game . . . 8
1.4 Outline and Course of Discussion . . . . . . . . . . . 12

I Supply Chain Risk Concepts – Fundamentals 17

2 The Genesis of Supply Chain Risk 19

2.1 Logistics Innovations – A Blessing and a Curse . . . 20
2.2 Supply Chain Disruptions . . . . . . . . . . . . . . . 23
2.2.1 Environmental Disruptions . . . . . . . . . . 29
2.2.2 Economic Disruptions . . . . . . . . . . . . . 30
2.2.3 Socio-Geopolitical Disruptions . . . . . . . . 33
2.2.4 Technological Disruptions . . . . . . . . . . . 34
2.3 Coping with Risk . . . . . . . . . . . . . . . . . . . . 35
2.3.1 Enterprise Risk . . . . . . . . . . . . . . . . . 35
2.3.2 Following the footsteps of Management . . . 37
X Contents

2.3.3 Identification needs Quantification – Quantifi-

cation needs Definition . . . . . . . . . . . . . 40

3 A New Definition of Supply Chain Risk 43

3.1 The Evolution of Risk . . . . . . . . . . . . . . . . . 45
3.2 Requirements for a Definition of Supply Chain Risk 47
3.3 Existing Approaches of Supply Chain Risk Definitions 48
3.4 Core Characteristics of Supply Chain Risk . . . . . . 50
3.4.1 Risk Objective . . . . . . . . . . . . . . . . . 52
3.4.2 Risk Exposition . . . . . . . . . . . . . . . . . 56
3.4.3 Risk Attitude . . . . . . . . . . . . . . . . . . 72
3.5 Re-defining Supply Chain Risk . . . . . . . . . . . . 74

4 Supply Chain Risk Analysis 77

4.1 The Risk of Supply Chain Risk Analysis . . . . . . . 79
4.1.1 Biases of Risk Identification . . . . . . . . . . 83
4.1.2 Biases of Risk Countermeasures . . . . . . . . 88
4.1.3 Breaking of Biases . . . . . . . . . . . . . . . 95
4.2 Main Elements of Supply Chain Risk Analysis . . . . 96
4.2.1 Analysis of Potential Triggers . . . . . . . . . 96
4.2.2 Analysis of Performance Measurement . . . . 107
4.2.3 Analysis of Supply Chain Constitution . . . . 117
4.3 Tasks of Supply Chain Risk Analysis . . . . . . . . . 127

5 Supply Chain Risk Analytics 131

5.1 Supply Chain Risk Analytics – Concept Definition . 132
5.2 The Value of Supply Chain Risk Analytics . . . . . . 135
5.2.1 Risk Acceptance . . . . . . . . . . . . . . . . 137
5.2.2 Risk Reduction Measures . . . . . . . . . . . 140
5.2.3 Risk Spreading Measures . . . . . . . . . . . 149
5.3 Quantification Measures for Supply Chain Risk . . . 152
5.3.1 Deviation Measures . . . . . . . . . . . . . . 153
5.3.2 Downside Risk . . . . . . . . . . . . . . . . . 153
5.3.3 Expected Values . . . . . . . . . . . . . . . . 154
5.3.4 Probability and other measures . . . . . . . . 155
Contents XI

5.4 Risk-aware Supply Chain Optimization . . . . . . . . 157

5.4.1 Modeling Approaches . . . . . . . . . . . . . 158
5.4.2 Solution Techniques . . . . . . . . . . . . . . 161
5.5 Research Gaps . . . . . . . . . . . . . . . . . . . . . 161

II Supply Chain Risk Identification and Assess-

ment – Simulation-based Framework 163

6 Simulation for Supply Chain Analysis 165

6.1 Simulation at a Glance . . . . . . . . . . . . . . . . . 167
6.1.1 Basics . . . . . . . . . . . . . . . . . . . . . . 167
6.1.2 Technical entities of Simulation Tools . . . . 171
6.1.3 Simulation Paradigms . . . . . . . . . . . . . 172
6.2 Simulation of Supply Chain Problems . . . . . . . . 175
6.3 Simulation and Optimization . . . . . . . . . . . . . 176

7 Design, Metamodeling, and Analysis of Simulation

Experiments 181
7.1 Meta-Models . . . . . . . . . . . . . . . . . . . . . . 184
7.2 Designs . . . . . . . . . . . . . . . . . . . . . . . . . 187
7.2.1 Purpose of Design . . . . . . . . . . . . . . . 188
7.2.2 Classic Factorial Designs . . . . . . . . . . . . 193
7.2.3 Design construction . . . . . . . . . . . . . . 196
7.3 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 198
7.3.1 Regression Analysis . . . . . . . . . . . . . . 199
7.3.2 Method of Least Squares . . . . . . . . . . . 200
7.3.3 Analysis of Variance (ANOVA) . . . . . . . . 202
7.3.4 Measures of Factor Effects . . . . . . . . . . . 202
7.4 Illustrative Examples . . . . . . . . . . . . . . . . . . 206
7.4.1 A 24 Full Factorial Experiment for the Analy-
sis of Production Characteristics . . . . . . . 206
7.4.2 A 24−1IV Fractional Factorial Experiment for the
Analysis of Production Characteristics . . . . 211
7.5 Cautions with the Design of Experiments . . . . . . 213
XII Contents

8 A Simulation-based Approach for Supply Chain Risk

Analysis 217
8.1 Requirements . . . . . . . . . . . . . . . . . . . . . . 218
8.2 A New Approach for Supply Chain Risk Analysis –
Basic Models . . . . . . . . . . . . . . . . . . . . . . 220
8.2.1 Scenario-based Procedure . . . . . . . . . . . 220
8.2.2 Screening Procedure . . . . . . . . . . . . . . 227
8.2.3 Procedure for Risk Quantification . . . . . . 229
8.3 Summarized Main Features of the Approach . . . . . 233

9 Representative Master Planning Module for Supply

Chains 235
9.1 Planning Tasks of Supply Chains . . . . . . . . . . . 236
9.2 Mathematical formulation of a Master Planning Prob-
lem . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
9.2.1 Determinants . . . . . . . . . . . . . . . . . . 241
9.2.2 Objective Function . . . . . . . . . . . . . . . 247
9.2.3 Restrictions . . . . . . . . . . . . . . . . . . . 248

10 A Conceptual Information Meta-Model for Supply

Chains 261
10.1 Requirements for a Supply Chain Information Meta-
Model . . . . . . . . . . . . . . . . . . . . . . . . . . 262
10.2 Related Work . . . . . . . . . . . . . . . . . . . . . . 264
10.3 Modeling Supply Chain Information . . . . . . . . . 266
10.3.1 Concepts . . . . . . . . . . . . . . . . . . . . 266
10.3.2 Properties . . . . . . . . . . . . . . . . . . . . 268
10.3.3 Relations . . . . . . . . . . . . . . . . . . . . 268
10.3.4 Constraints . . . . . . . . . . . . . . . . . . . 269
10.4 A Supply Chain Model . . . . . . . . . . . . . . . . . 271

11 A Real Case Evaluation of the SimSCRF Approach 277

11.1 The Case . . . . . . . . . . . . . . . . . . . . . . . . 279
11.2 Contemporary Risk Quantification . . . . . . . . . . 281
11.3 A new View on Supply Chain Risk Analysis . . . . . 286
Contents XIII

11.4 Supply Chain Risk Analysis . . . . . . . . . . . . . . 288

11.4.1 Work Flow . . . . . . . . . . . . . . . . . . . 288
11.4.2 Effect Analysis . . . . . . . . . . . . . . . . . 300
11.4.3 Risk Line Identification . . . . . . . . . . . . 303
11.5 Conclusions and Outlook . . . . . . . . . . . . . . . 308

III Strategic Supply Chain Risk Mitigation – Op-

timization Approaches 311

12 Embedding Comprehensive Risk 313

12.1 Mathematical Model Formulations . . . . . . . . . . 316
12.1.1 Notations . . . . . . . . . . . . . . . . . . . . 316
12.1.2 The Risk-aware Capacitated Plant Location
Problem (CPLP-Risk) . . . . . . . . . . . . . 319
12.2 Illustrative Example . . . . . . . . . . . . . . . . . . 327
12.2.1 Data Input . . . . . . . . . . . . . . . . . . . 328
12.2.2 Solution Plausibility . . . . . . . . . . . . . . 333
12.2.3 The Value of Risk Consideration . . . . . . . 339
12.2.4 Quantification of Supply Chain Risk . . . . . 343
12.3 Preliminary Computational Results . . . . . . . . . . 345
12.4 Model Extensions . . . . . . . . . . . . . . . . . . . . 354
12.4.1 Model Extensions for the Affected Supply
Chain . . . . . . . . . . . . . . . . . . . . . . 354
12.4.2 Model Extensions for the Risk Objective . . . 357
12.4.3 Model Extensions for the Risk Attitude . . . 358
12.5 Conclusions and Outlook . . . . . . . . . . . . . . . 360

13 Conclusions and Outlook 363

13.1 Conlusions . . . . . . . . . . . . . . . . . . . . . . . . 364
13.2 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . 369

Bibliography 373
List of Figures

1.1 A supply chain example . . . . . . . . . . . . . . . 9

1.2 Outline . . . . . . . . . . . . . . . . . . . . . . . . 14

2.1 Global risks landscape – movements from 2012 to

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2 Economic damage in US$ billion caused by reported
natural disaster (1975-2014) . . . . . . . . . . . . . 31
2.3 Risk perception and complexity of different logistics
systems . . . . . . . . . . . . . . . . . . . . . . . . 37
2.4 Process cycle of supply chain risk management steps 39

3.1 Analysis of supply chain risk definitions . . . . . . 51

3.2 Core characteristics of supply chain risk . . . . . . 52
3.3 Supply chain risk objectives . . . . . . . . . . . . . 55
3.4 Literature analysis of supply chain risk categories . 66

4.1 Formation of supply chain risk analysis . . . . . . . 81

4.2 Relationship between events and their related conse-
quences . . . . . . . . . . . . . . . . . . . . . . . . 83
4.3 Graphical visualization of functional relation between
the set of identified supply chain risks and potential
mitigation options . . . . . . . . . . . . . . . . . . 89
4.4 Perspectives of supply chain risk management . . . 92
4.5 Traditional vs. risk-aware planning process . . . . 94
4.6 Relationship between events and their related conse-
quences . . . . . . . . . . . . . . . . . . . . . . . . 97
4.7 Elements of uncertainty profiles . . . . . . . . . . . 101
XVI List of Figures

4.8 Exemplary uncertainty profiles of supply chain fac-

tor values . . . . . . . . . . . . . . . . . . . . . . . 103
4.9 Uncertainty profiles of real-world supply chain factors 104
4.10 Exemplary uncertainty profiles of supply chain fac-
tor values influenced by different potential triggers 106
4.11 Functionality and profitability of supply chain pro-
cesses affect efficiency and effectiveness . . . . . . . 108
4.12 Exemplary uncertainty profiles of supply chain fac-
tor values . . . . . . . . . . . . . . . . . . . . . . . 112
4.13 Acceptable performance deterioration levels of more
risk-averse and more risk-seeking decision makers . 114
4.14 Risk profiles . . . . . . . . . . . . . . . . . . . . . . 116
4.15 Levels of structural metrics indicating supply chain
resilience . . . . . . . . . . . . . . . . . . . . . . . . 119
4.16 Exemplary extracts of a supply chain and a bill of
material . . . . . . . . . . . . . . . . . . . . . . . . 121

5.1 Example of a supply chain . . . . . . . . . . . . . . 136

5.2 Example of a disruption propagating through the
entire supply chain . . . . . . . . . . . . . . . . . . 137
5.3 Impact of a disruption without supply chain risk
management . . . . . . . . . . . . . . . . . . . . . . 139
5.4 Development of performance and extra expenses in
the presence of a disruption when supply chain risk
management actions are not installed . . . . . . . . 140
5.5 Impact of a disruption in the presence of a disruption
when reactive countermeasures are installed . . . . 143
5.6 Development of performance and extra expenses in
the presence of a disruption when reactive counter-
measures are installed . . . . . . . . . . . . . . . . 144
5.7 Impact of a disruption in the presence of a disruption
when flexible countermeasures are installed . . . . 145
5.8 Development of performance and extra expenses in
the presence of a disruption when flexible counter-
measures are installed . . . . . . . . . . . . . . . . 146
List of Figures XVII

5.9 Impact of a disruption in the presence of a disruption

when robust countermeasures are installed . . . . . 147
5.10 Measures applied for quantifying supply chain risk 156

6.1 Process steps of simulation . . . . . . . . . . . . . . 170

6.2 Technical components of a simulation . . . . . . . . 172
6.3 Causal and temporal classification of simulation and
optimization integrating approaches . . . . . . . . 178

7.1 Main elements of an experimental setup . . . . . . 182

7.2 Relationship between input factors and output vari-
able of the system and its simulated meta-model . 185
7.3 A response surface and a corresponding contour plot 192
7.4 Interaction plots . . . . . . . . . . . . . . . . . . . 210
7.5 Residuals and normal probability plot of 24 factorial
experiment . . . . . . . . . . . . . . . . . . . . . . 215

8.1 Relationship between supply chain risk defining en-

tities . . . . . . . . . . . . . . . . . . . . . . . . . . 222
8.2 Conceptual and simulation approach of a new supply
chain risk analysis approach . . . . . . . . . . . . . 223
8.3 Basic process flow of a new supply chain risk analysis
model . . . . . . . . . . . . . . . . . . . . . . . . . 225
8.4 Process flow of the screening procedure within the
supply chain risk analysis model . . . . . . . . . . . 228
8.5 Process flow of the risk quantification procedure . . 230
8.6 Risk line . . . . . . . . . . . . . . . . . . . . . . . . 232

9.1 Supply chain planning matrix . . . . . . . . . . . . 237

9.2 Software modules covering the SCP-matrix . . . . 239
9.3 Set of nodes . . . . . . . . . . . . . . . . . . . . . . 240
9.4 Visualization of the production and resource plan-
ning Variables . . . . . . . . . . . . . . . . . . . . . 249
9.5 Visualization of modeling logic for substitute prod-
ucts . . . . . . . . . . . . . . . . . . . . . . . . . . 253
XVIII List of Figures

10.1 Concepts of the deduced information meta-model for

supply chains . . . . . . . . . . . . . . . . . . . . . 267
10.2 Link-node constraint . . . . . . . . . . . . . . . . . 269
10.3 Capability-activity-product constraint . . . . . . . 270
10.4 Conceptual modeling of the supply chain task trans-
port . . . . . . . . . . . . . . . . . . . . . . . . . . 274
10.5 Conceptual modeling of the supply chain task pro-
duction . . . . . . . . . . . . . . . . . . . . . . . . 275
10.6 Conceptual modeling of the supply chain task storing 276

11.1 Supply chain under investigation: physical view . . 280

11.2 Supply chain under investigation: product view . . 282
11.3 Relationship between frozen horizon, the emergence
of disruption information, and the start of modifica-
tions of supply chain factors . . . . . . . . . . . . . 290
11.4 Planning reports for the reference supply chain and
a single-scenario supply chain: network view . . . . 291
11.5 Planning reports for the reference supply chain and
a single-scenario supply chain: KPI view . . . . . . 292
11.7 User input aligned to the work flow of the SimSCRF
model . . . . . . . . . . . . . . . . . . . . . . . . . 293
11.6 Conceptual modeling of the supply chain task pro-
duction (replicate) . . . . . . . . . . . . . . . . . . 294
11.8 Factor template for supply chain factor maximum
production capacity . . . . . . . . . . . . . . . . . . 296
11.9 Extract of the definition script for base data activity
amount . . . . . . . . . . . . . . . . . . . . . . . . 298
11.10 Extract of the definition script for base data activity
costs . . . . . . . . . . . . . . . . . . . . . . . . . . 299
11.11 Definition script for the performance indicator activ-
ity expenses . . . . . . . . . . . . . . . . . . . . . . 300
11.12 Visualization of risk line quantification (A) . . . . 304
11.13 Visualization of risk line quantification (B) . . . . . 305
11.14 Risk line for factor A and D . . . . . . . . . . . . . 307
1.3 The Real Introduction: The Name of the Game 9

organizations and the goods sold to the final customer can be prod-
ucts or services. Figure 1.1 shows a typical supply chain, its entities
and flows. Therein raw materials are procured from suppliers, prelim-
inary products are produced at distinct or among several production
facilities, shipped to warehouses for storage and then forwarded to
final assembly, manufacturing or production. By global and regional
distribution centers or retailers the final goods are transferred to the
customers. Supply chains do not only ship materials or offer services,
but they are also responsible for the transfer of financial and infor-
mation flows. More detailed descriptions of supply chains and their
defining entities are provided by several standard works, see for ex-
ample Chopra and Meindl [55], Simchi-Levi et al. [274], and Stadtler
and Kilger [291].

Figure 1.1: A supply chain example, see [291].

The ultimate purpose of a supply chain is to satisfy as many cus-

tomer orders as possible. Decision makers need to balance the sup-
ply and the demand by efficiently allocating resources to the (ex-
pected) customer requests. Therefore, a lot of decisions have to be
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hopped up close to Mr. Elephant, and he said in his high, squeaky
voice:
“Grandfather, I have no strength to walk. Let me get up on your
back.”
“Climb up, my grandson,” said Mr. Elephant.
 And just then they came toward home.

He put his trunk down for a ladder, and Mr. Frog climbed up. They
had not gone very far when Mr. Frog hopped up close to Mr.
Elephant’s ear, and he said:
“I am going to fall, grandfather. Give me some small cords from
the roadside that I may bind your mouth, and hold myself upon your
back.”
“I will, grandson,” said Mr. Elephant.
So Mr. Elephant stripped some small cords from a birch tree by
the roadside, and handed them to Mr. Frog. Then Mr. Frog bound Mr.
Elephant’s mouth, and they went on a little farther. It was not long,
though, before Mr. Frog spoke again to Mr. Elephant.
“Grandfather,” he said, “find me a small, green twig that I may fan
the mosquitoes from your ears.”
“I will, grandson,” said Mr. Elephant, so he broke a small, green
twig from the birch tree, and reached it up to Mr. Frog; and just then
they came toward home.
“See Mr. Elephant,” cried Mr. Hare.
“See Mr. Elephant,” cried Mr. Tiger.
“See Mr. Elephant,” cried Mr. Lion and all the others, “Mr. Elephant
is Mr. Frog’s horse.”
Mr. Elephant turned himself about, and he saw Mr. Frog on his
back, holding the reins and the whip.
“Why, so I am, grandson,” said Mr. Elephant.
Then Mr. Frog jumped down to the ground, and he laughed and he
laughed until he nearly split his coat, because he had played a trick
on Mr. Elephant.
 HOW DRAKESTAIL
WENT TO THE
KING.

Once upon a time there was a wee little duck, with a very long tail,
so he was called Drakestail. Now, Drakestail had some money of his
very, very own, and the king asked if he might take it. So Drakestail
loaned all his money to the king.
But the king kept Drakestail’s money for a year and a day, and still
he did not send it back. Drakestail said he would go to the king and
bring back the money himself.
So off he started, one very fine morning, for the king’s house. The
sun was shining on the ponds, and Drakestail waddled along in the
middle of the road, feeling very fine. As he traveled, he met a fox,
and the fox said, “Where do you go this fine morning, Friend
Drakestail?”
“To the king,” said Drakestail, “for he owes me money.”
“I will travel along with you,” said the fox.
“Ah,” said Drakestail, “your four legs would soon tire. Come along
with me this way,” and he opened his wee little bill very wide, and
down his wee little throat went the fox.
Then Drakestail traveled on a little farther. As he went he came to
a ladder lying beside the road.
“Where do you go this fine morning, Friend Drakestail?” asked the
ladder.
“To the king,” said Drakestail, “for he owes me money.”
 “I will travel along with you,” said the ladder.
“Your wooden legs would soon tire,” said Drakestail. “Come along
with me this way,” and he opened his little bill very wide, and down
his wee little throat went the ladder.
Then Drakestail traveled on a bit farther until he came to his friend,
the river, lying and glistening in the sunshine.
“Where do you go this fine morning, Friend Drakestail?” asked the
river.
“To the king, for he owes me money,” said Drakestail.
“I will travel with you,” said the river.
“You would soon tire if you ran so far, my friend,” said Drakestail.
“Come along with me this way.” He opened his wee bill very wide,
and down his wee little throat went the little river.
Then Drakestail traveled and traveled until he came to the king’s
house. Now Drakestail thought that the king would meet him at the
gate, so he called out very loudly:
“Honk! Honk! Drakestail waits at the gate.”
But the king did not come out to meet him. Who should appear at
the gate but the king’s cook, and the cook took Drakestail by his two
little legs and flung him into the poultry yard. The other fowls, who
were ill-bred birds, ran up to Drakestail and bit him, and jeered at his
large tail. It would have gone very badly with Drakestail, but he
called to his friend, the fox:

“Reynard, Reynard, come out to the earth,

Or Drakestail’s life is of little worth.”

So the fox came out, and he ate up all the ill-bred fowls in the
king’s poultry yard. But still Drakestail was badly off. He heard the
king’s cook putting the broth pot over the fire.

“Ladder, ladder, come out to the wall,

 Drakestail does not wish to be broth at all,”

he cried. So the ladder came out and leaned against the wall, and
Drakestail climbed over in safety. But the king’s cook saw Drakestail
and set out after him. He caught poor Drakestail and clapped him
into the broth pot, and hung him over the fire.

“River, my sweetheart, put out this hot fire,

The flames that would cook me rise higher and higher,”

cried Drakestail. So the river put out the fire with a great noise and
sputtering, which the king heard. And the king came running to the
kitchen.
“Good morning to you, King,” said Drakestail, hopping out of the
broth pot, and making a very low bow, “are you through with my
money, which you have kept for a year and a day?”
“That I am, Drakestail,” said the king. “You shall have it at once.”
So the king gave Drakestail the money that he owed him, and
Drakestail waddled home again to tell of all his travels.
 THE GREEDY CAT.

Once upon a time there lived a cat and a mouse, and they thought
they would ask each other to dinner, turn and turn about. First it was
the cat’s turn to ask the mouse, and he set his table and invited her,
but he did not have much to eat; only a dry crust of bread and some
water. But the mouse, who was very polite, ate it and thanked the
cat.
When it was the mouse’s turn to give a dinner, she spread a fine
feast, platters of fish, and saucers of milk, and joints of meat. Then
she baked a large cake with sugar on the top for the cat, and for
herself she made a very tiny cake with no frosting.
The cat came to the mouse’s dinner, and he ate the fish and the
meat, and lapped the milk, and ate the cake. Then he looked around
in a greedy way, and he said:
“What a very light dinner. Have you nothing more in the house to
eat, mouse?”
“Here is my cake,” said the mouse, who was not at all greedy.
So the cat ate the mouse’s cake, and then he looked about again
in a greedy way, and he said:
“Have you anything more to eat, mouse?”
“Nothing, kind sir,” said the mouse, “unless you eat me.”
She thought the cat would never be so greedy as that, but he
opened his mouth wide, and down his throat went the mouse.
Then the greedy cat walked out of the mouse’s house and down
the road, swinging his tail, for he felt very fine.
 On his way he met an old woman. Now the old woman had been
peeping in at the window, and she had seen what that greedy cat
had done.
“You greedy cat,” she said, “to eat your friend, the mouse.”
“Greedy, indeed,” said the cat, “I have a mind to eat you.”
Then he opened his mouth very wide, and down his throat went
the old woman.
Then on down the road went the cat, swinging his tail, and feeling
finer than ever. As he went he met an old man taking his load of
apples to market. The old man was beating his donkey to make it go
faster.
“Scat, scat, pussy,” said the man, “my donkey will tread on you.”
“Tread on me, indeed,” said the cat, shaking his fat sides, “I have
eaten my friend the mouse, I have eaten an old woman. What is to
hinder my eating you?”
So the greedy cat opened his mouth very wide, and down his
throat went the man and his donkey.
Then he walked along in the middle of the road again. After a
while he spied a great cloud of dust, and he heard a great tramping
of feet. It was the king riding in his chariot, and behind him marched
all his soldiers and his elephants.
“Scat, scat, pussy,” said the king, “my elephants might step on
you.”
“Step on me, indeed,” said the cat, “I have eaten my friend the
mouse, I have eaten an old woman, I have eaten an old man and a
donkey. What is to hinder my eating a king and a few elephants?”
So the cat opened his mouth wide, and down his throat went the
king and the soldiers and all the elephants.
Then the cat started on again, but more slowly. He was really not
hungry any more. As he traveled he met two land crabs, scuttling
along in the dust.
 “Scat, scat, pussy,” squeaked the crabs.
“I have eaten my friend the mouse,” said the cat, “I have eaten an
old woman, and a man and a donkey, and a king and all his soldiers
and all his elephants. What is to hinder my eating you, too?”
Then the cat opened his mouth wide, and down his throat went the
two crabs.
But the crabs began to look about them there in the dark. There
were the soldiers trying to form in fours, but there was not room. The
elephants were stepping on each other’s toes. The old woman was
scolding, and in a corner sat the poor little mouse, her paws and
ears all drooping.
“We must go to work,” said the crabs.
Then they began snipping and snipping with their sharp little
claws. Soon there was a hole large enough, and they crept out.
Then out came the king and his soldiers and all his elephants. Out
came the old woman scolding her cat. Out came the man and his
donkey. Last of all, out came the little mouse with one little cake
under her arm, for one cake was all that she had wanted.
But the greedy cat had to spend all the rest of the day sewing up
the hole in his coat.
 THE THREE BILLY
GOATS GRUFF.

Once upon a time there were three Billy Goats, and one was a
very large Goat, and one was a middle-sized Goat, and one was a
tiny Goat, but the three had the very same name, which was Gruff.
One morning the three Billy Goats started away from home, for
they had decided to go far, far to a hillside where there was a
quantity of green grass, and they might eat of it and make
themselves fat.
Now, on the way to the hillside there ran a brook, and over the
brook was a bridge, and under the bridge lived a Troll with eyes as
large as saucers, and a nose as long as a poker. And this Troll was
fond of eating Billy Goats.
First of all came the youngest Billy Goat Gruff to cross over the
bridge. Trip trap, trip trap, his little feet pattered upon the boards.
“Who is that tripping over my bridge?” called up the Troll in a surly
voice.
“Oh, it’s only I, the tiniest Billy Goat Gruff, going over to the hillside
to make myself fat,” the Goat called back in a wee small voice.
“I am going to gobble you up, Billy Goat Gruff,” said the Troll.
“Oh, no, pray do not take me,” said the tiniest Billy Goat Gruff; “I
am too little, that I am. Wait until the second Billy Goat Gruff comes
along. He is ever so much bigger than I.”
“Well, be off with you,” said the Troll.
 Then came the middle-sized Billy Goat Gruff, to cross the bridge.
Trip trap, trip trap, his middle-sized feet pattered upon the boards.
“Who is that tripping over my bridge?” called up the Troll.
“Oh, it’s only I, the middle-sized Billy Goat Gruff, going over to the
hillside to make myself fat,” the Goat called back in a middle-sized
voice.
“I am coming to gobble you up, Billy Goat Gruff,” said the Troll.
“Oh, no, pray do not take me,” said the middle-sized Billy Goat
Gruff; “I am a little larger than the tiniest Billy Goat, but I am not large
enough to make a mouthful for you. Of that I am quite sure.”
“Well, be off with you,” said the Troll.
Then, last of all, came the great Billy Goat Gruff, to cross over the
bridge.
Trip trap, trip trap, his great feet tramped across the boards.
“Who is that tramping over my bridge?” called up the Troll.
“It is I, the great Billy Goat Gruff, going over to the hillside to make
myself fat,” the Goat called back in a great voice.
“I am coming to gobble you up, Billy Goat Gruff,” said the Troll.
“Come along,” said the great Billy Goat Gruff.
So the Troll, whose eyes were as large as saucers and his nose
as long as a poker, came hurrying up to the top of the bridge,—but,
ah, this is what happened to him.
 The Goat tossed the Troll so high with his horns.

There on the bridge stood the great Billy Goat Gruff with his feet
firmly planted on the boards and his head lowered, and as soon as
the Troll came near—rush, scamper—the Goat tossed the Troll so
high with his horns that no one has ever seen a Troll under a bridge
from that day to this.
Then the great Billy Goat Gruff went on to the hillside, and the
three Billy Goats ate, and ate, and made themselves so fat that they
could scarcely walk home again.
 THE HOBYAHS.

Once upon a time there lived a little old man and a little old woman
in a house all made of hemp stalks. And they had a little dog named
Turpie who always barked when any one came near the house.
One night when the little old man and the little old woman were
fast asleep, creep, creep, through the woods came the Hobyahs,
skipping along on the tips of their toes.
“Tear down the hemp stalks. Eat up the little old man, and carry
away the little old woman,” cried the Hobyahs.
Then little dog Turpie ran out, barking loudly, and he frightened the
Hobyahs so that they ran away home again. But the little old man
woke from his dreams, and he said:
“Little dog Turpie barks so loudly that I can neither slumber nor
sleep. In the morning I will take off his tail.”
So when it came morning, the little old man took off little dog
Turpie’s tail to cure him of barking.
The second night along came the Hobyahs, creep, creep through
the woods, skipping along on the tips of their toes, and they cried:
“Tear down the hemp stalks. Eat the little old man, and carry away
the little old woman.”
Then the little dog Turpie ran out again, barking so loudly that he
frightened the Hobyahs, and they ran away home again.
But the little old man tossed in his sleep, and he said:
“Little dog Turpie barks so loudly that I can neither slumber nor
sleep. In the morning I will take off his legs.”
 So when it came morning, the little old man took off Turpie’s legs
to cure him of barking.
The third night the Hobyahs came again, skipping along on the
tips of their toes, and they called out:
“Tear down the hemp stalks. Eat up the little old man, and carry
away the little old woman.”
Then little dog Turpie barked very loudly, and he frightened the
Hobyahs so that they ran away home again.
But the little old man heard Turpie, and he sat up in bed, and he
said:
“Little dog Turpie barks so loudly that I can neither slumber nor
sleep. In the morning I will take off his head.”
So when it came morning, the little old man took off Turpie’s head,
and then Turpie could not bark any more.
That night the Hobyahs came again, skip- ping along on the tips of
their toes, and they called out:
“Tear down the hemp stalks. Eat the little old man, and carry off
the little old woman.”
Now, since little dog Turpie could not bark any more, there was no
one to frighten the Hobyahs away. They tore down the hemp stalks,
they took the little old woman away in their bag, but the little old man
they could not get, for he hid himself under the bed.
Then the Hobyahs hung the bag which held the little old woman up
in their house, and they poked it with their fingers, and they cried:
“Look you! Look you!”
But when it came daylight, they went to sleep, for Hobyahs, you
know, sleep all day.
The little old man was very sorry when he found that the little old
woman was gone. He knew then what a good little dog Turpie had
been to guard the house at night, so he brought Turpie’s tail, and his
legs, and his head, and gave them back to him again.
 Then Turpie went sniffing and snuffing along to find the little old
woman, and soon came to the Hobyahs’ house. He heard the little
old woman crying in the bag, and he saw that the Hobyahs were all
fast asleep. So he went inside.
Then he cut open the bag with his sharp teeth, and the little old
woman hopped out and ran home; but Turpie got inside the bag to
hide.
When it came night, the Hobyahs woke up, and they went to the
bag, and they poked it with their long fingers, crying:
“Look you! Look you!”
But out of the bag jumped little dog Turpie, and he ate every one
of the Hobyahs. And that is why there are not any Hobyahs now.
 THE KID WHO
WOULD NOT GO.

Once upon a time I was walking across London Bridge, and I

found a penny. So I bought a little kid. But the kid would not go. And I
saw by the moonlight it was long past midnight. It was time kid and I
were home an hour and a half ago.
Then I met a staff, and to the staff I said:
“Staff, staff, drive kid. I see by the moonlight it is long past
midnight. It is time kid and I were home an hour and a half ago.”
But the staff would not drive kid.
Then I met a hatchet, and to the hatchet I said:
“Hatchet, chop staff, staff will not drive kid. I see by the moonlight it
is long past midnight. It is time kid and I were home an hour and a
half ago.”
But the hatchet would not chop staff.
Then I met a torch, and to the torch I said:
“Torch, burn hatchet, hatchet will not chop staff, staff will not drive
kid. I see by the moonlight it is long past midnight. It is time kid and I
were home an hour and a half ago.”
But the torch would not burn the hatchet.
Then I met the wind, and to the wind I said:
“Wind, put out torch, torch will not burn hatchet, hatchet will not
chop staff, staff will not drive kid. I see by the moonlight it is long past
midnight. It is time kid and I were home an hour and a half ago.”
 But the wind would not put out the fire.
Then I met a tree, and to the tree I said:
“Tree, stop wind, wind will not put out torch, torch will not burn
staff, staff will not drive kid. I see by the moonlight it is long past
midnight. It is time kid and I were home an hour and a half ago.”
But the tree would not.
Then I met a wee mouse, and to the mouse I said:
“Mouse, gnaw tree, tree will not stop wind, wind will not put out
torch, torch will not burn staff, staff will not drive kid. I see by the
moonlight it is long past midnight. It is time kid and I were home an
hour and a half ago.”
Then the wee, wee mouse began to gnaw the tree, the tree began
to stop the wind, the wind began to put out the torch, the torch began
to burn the staff, the staff began to drive the kid, and the kid began to
go.
See by the moonlight it is almost midnight. But kid and I were
home an hour and a half ago.
 THE ROBIN’S
CHRISTMAS SONG.

Once upon a time there was an old gray Pussy and she was down
by the waterside when the trees and ground were white with snow.
And there she saw a wee, wee Robin Redbreast hopping upon a
branch, so Pussy said to him:
“Where are you going, Robin Redbreast, this frosty Yuletide
weather?”
Then the wee, wee Robin said to the Pussy, “I am going to the
King to sing him a song this good Yule morning.”
And the gray Pussy replied, “Go not yet. Come here, Robin
Redbreast, and I will let you see the bonny white necklace I wear
around my neck.”
But the wee, wee Robin said, “No, no, gray Pussy. You may show
the bonny white necklace that you wear around your neck to the little
mice, but not to me.”