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Beer Game

I didn’t research the Beer Game itself prior to the game being played.   I did read the summary provided of the game, but if I had done a little research on the web prior to the game, I would have had quite a bit of insight.   It seems this game is very well known and used quite often in schools and management training to show the supply chain in action.   The game has been around since the 1960’s when a group from MIT’s Sloan School of Management introduced the game as a part of a research project. The game was originally named the production-distribution game and is continued to be known as this but has been coined the Beer Game (Sterman,1992).

The game has four players per team; Retailer, Wholesaler, Distributor, and Factory. The pennies represent cases of beer. A deck of cards represents customer demand. Each simulated week, customers purchase from the retailer, who ships the beer requested out of inventory. The retailer in turn orders from the wholesaler, who ships the beer requested out of their own inventory. Likewise the wholesaler orders and receives beer from the distributor, who in turn orders and receives beer from the factory, where the beer is brewed.

At each stage there are shipping delays and order processing delays. The players' objective is to minimize total team costs. Inventory holding costs are $.50/case/week. Backlog costs are $1.00/case/week, to capture both the lost revenue and the ill will stock-outs cause among customers. Costs are assessed at each link of the distribution chain. (Sterman,1999).

Since the Beer game has been around since the 1960’s the game is the best known simulation game of its kind and allows players a glimpse of the intricacies within the supply chain.   Other games that deal with supply chain management are:   Poker Chip, Wood Supply, LEAP Supply Chain, ITL and LEGO games (Cox, 2006).   The Beer Game far outreaches all the other games; its focus is on dynamic complexity within the supply chain.

Complexity...