Beer Game Supply Chain Simulation Overview
This simulation involves managing a supply chain for selling kegs of beer, with roles including factory, distributor, wholesaler, and retailer. The game focuses on supply channels, inventory management, order processing, and fulfilling consumer demand. Players must receive beer from suppliers, manage inventory levels, ship beer to consumers, and handle backlogged orders. The simulation aims to teach supply chain dynamics and decision-making in a realistic business environment.
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Presentation Transcript
Beer Game Supply Chain Simulation Dr. CK Farn 2023 Spring
Simulation Settings Overly simplified supply chain Selling kegs of beer Roles Factory (warehouse) Distributor Wholesaler Retailer CYCY Prof CK Farn 2
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 3
Retailer Order beer from wholesaler Manages inventory levels Sells/ships beer to fill end-consumer s orders CYCY Prof CK Farn 4
Wholesaler Order beer from distributor Manages inventory levels Sells/ships beer to fill retailer s orders CYCY Prof CK Farn 5
Distributor Order beer from factory warehouse Manages inventory levels Sells/ships beer to fill wholesaler s orders CYCY Prof CK Farn 6
Factory Schedule beer production in factory Manages finished goods inventory levels Sells/ships beer to fill distributor s orders CYCY Prof CK Farn 7
Leadtimes Order processing delay Transportation delay Unit cycle time: one week CYCY Prof CK Farn 8
Cost structure Inventory holding cost: $1 for each keg of beer in the inventory at the end of each week Lost of sales cost $2 for each keg of beer that is backlogged at the end of each week CYCY Prof CK Farn 9
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 10
Objectives Minimize total channel costs The total cost that the four members incurred through the exercise CYCY Prof CK Farn 11
Scenarios/Round 1. lead time = 5 weeks Order delay = 4, transport delay = 1 2. lead time = 2 weeks Order delay = 1, transport delay = 0 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 12
Beer Game Site TBAin class CYCY Prof CK Farn 13
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 14
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 15
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 16
Round #5 lead time = 3 weeks Order delay = 2, transport delay = 1 Rolling forecast Change of roles again R W W D D F F R CYCY Prof CK Farn 17
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 18
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 19
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 20
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 21
Analysis report Prepare an analysis of the usage of the concepts you learnt through the Beer Game. 1. What went wrong? How can the performance be improved? 2. What are the important factors affecting supply chain performance? 3. How can IT help in improving supply chain performance? CYCY Prof CK Farn 22
