Beer Distribution Game: Experiencing Supply Chain Challenges
The beer distribution game provides a hands-on experience of supply chain coordination issues, emphasizing the significance of information sharing and collaboration. Players take on different roles in the supply chain, such as factory, distributor, wholesaler, and retailer, to understand the impact of delays and inventory management. Through this simulation, participants learn about order processing, transportation delays, inventory holding costs, and the implications of backlogs on sales.
Uploaded on Feb 15, 2025 | 0 Views
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
4 Beer Game Supply Chain Simulation Dr. CK Farn 2024 Spring
Beer Game The beer distribution game is an educational game that is used to experience typical coordination problems of a supply chain process It outlines the importance of information sharing, supply chain management and collaboration throughout a supply chain process Invented by Jay Forrester at MIT in the 1960 s CYCY Prof CK Farn 2
Simulation Settings Overly simplified supply chain Selling kegs of beer Roles Factory (warehouse) Distributor Wholesaler Retailer CYCY Prof CK Farn 3
Supply Channels From shop floor Transport delays Factory Factory Order Distributor Distributor Order Wholesaler Wholesaler Order processing delays Order To Consumers Retailer Retailer CYCY Prof CK Farn 4
Retailer (R) Order beer from wholesaler Manages inventory levels Sells/ships beer to fill end-consumer s orders CYCY Prof CK Farn 5
Wholesaler (W) Order beer from distributor Manages inventory levels Sells/ships beer to fill retailer s orders CYCY Prof CK Farn 6
Distributor (D) Order beer from factory warehouse Manages inventory levels Sells/ships beer to fill wholesaler s orders CYCY Prof CK Farn 7
Factory (F) Schedule beer production in factory Manages finished goods inventory levels Sells/ships beer to fill distributor s orders CYCY Prof CK Farn 8
Leadtimes Order processing delay Transportation delay Unit cycle time: one week CYCY Prof CK Farn 9
Cost structure Inventory holding cost: $1 for each keg of beer in the inventory at the end of each week Lost of sales (shortage) cost $2 for each keg of beer that is backlogged at the end of each week CYCY Prof CK Farn 10
What you should do every week Receive beer from upstream supplier Receive order from downstream customer Ship the beer to fill the demand as much as possible, as inventory permit Backlogged orders must be filled in subsequent week, as inventory permit Send an order to your upstream supplier CYCY Prof CK Farn 11
Objectives Minimize total channel costs The total cost that the four members incurred through the exercise CYCY Prof CK Farn 12
Scenarios/Round 1. lead time = 5 weeks Order delay = 3, transport delay = 2 2. lead time = 2 weeks Order delay = 1, transport delay = 1 3. lead time = 3 weeks Visibility weekly POS data, downstream inventory level 4. lead time = 3 weeks Known average weekly demand and demand pattern 5. lead time = 3 weeks 4-week Rolling forecast available, 90% accurate CYCY Prof CK Farn 13
Beer Game Site TBAin class Rounds #1-#5, no discussions among supply chain partners CYCY Prof CK Farn 14
Round #1 lead time = 5 weeks Order delay = 3, transport delay = 2 Four roles R W D F CYCY Prof CK Farn 15
Round #2 lead time = 2 weeks Order delay = 1, transport delay = 1 Change of roles R W W D D F F R CYCY Prof CK Farn 16
Round #3 lead time = 3 weeks Order delay = 2, transport delay = 1 Visibility weekly POS data, downstream inventory level Change of roles again R W W D D F F R CYCY Prof CK Farn 17
Round #4 lead time = 3 weeks Order delay = 2, transport delay = 1 Average demand = 10 Winter weeks 1-6; summer weeks 10-18; winter weeks 22-25 Change of roles again R W W D D F F R CYCY Prof CK Farn 18
Round #5 lead time = 3 weeks Order delay = 2, transport delay = 1 Rolling forecast for 6 weeks Change of roles again R W W D D F F R CYCY Prof CK Farn 19
Round #6 lead time = 3 weeks Order delay = 2, transport delay = 1 Visibility weekly POS data, downstream inventory level Supply chain partners are allowed to discuss Change of roles again R W W D D F F R CYCY Prof CK Farn 20
Rolling forecast W#1 1 2 3 4 5 6 7 8 9 10 11 12 2 3 4 5 6 7 8 9 CYCY Prof CK Farn 21
Rolling forecast 2 W# 10 11 12 13 14 15 16 17 18 19 20 21 10 11 12 13 14 14 16 17 18 CYCY Prof CK Farn 22
Rolling forecast 3 W# 19 20 21 22 23 24 25 26 27 28 29 30 19 20 21 22 23 24 25 CYCY Prof CK Farn 23
Things to do After each Round 1. Download the operations data recorded during the process. 2. Draw a time series diagram of weekly order. Try to explain your ordering behavior, and any strategy that you took. 3. Draw a time series diagram of weekly inventory level. Prepare a Analysis Report to be presented in class CYCY Prof CK Farn 24
Analysis report Evaluate your team performance. What went wrong? What can be done if you have next time so that performance can be improved? Share your take aways: What have you learnt through the game? What are the important factors affecting supply chain performance? How can IT help in improving supply chain performance? CYCY Prof CK Farn 25
Assignment #2 Due next week Prepare the Analysis Report (pdf) Prepare a 15-20 minutes presentation (ppt) Summarize your analysis report What have been discussed on the Internet regarding the Beer Game? CYCY Prof CK Farn 26
