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What is Beer Game

Chapter 181
Encyclopedia of Networked and Virtual Organizations
There are four levels (retailer, wholesaler, distributor and manufacturer) as well as the purchaser. Each player simulates being one level of the supply chains, so the purchasers order from a retailer, who has to decide how much to order from his supplier, given the stock that he has. This supplier in turn has to order from his distributor, who has to order from the factory.
Published in Chapter:
Revision of the Bullwhip Effect
David de la Fuente (Oviedo University, Spain)
Copyright: © 2008 |Pages: 7
DOI: 10.4018/978-1-59904-885-7.ch181
Abstract
A supply chain is composed of all the stakeholders and processes involved in satisfying consumer demand: wholesaler, retailer, warehousing, transport and so on. A classic method to understand the internal workings of a supply chain is the much-used beer distribution game that came out of MIT during the sixties. In this game, each player takes on the role of one of the members of the chain (consumer, retailer, wholesaler and manufacturer). The aim is for each of them to coordinate their actions in such a way as to satisfy the demands of the upstream member of the chain at the least possible cost. Sterman (1989) provided evidence of an effect that had already been described by Forrester (1961) whereby initial consumer demand is distorted and amplified as it passes along the chain. This increment is known as the Forrester or Bullwhip effect.
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Chapter 222
The Bullwhip Effect in Supply Chains
Simulation of a supply chain consisting of producer, distributor, retailer and consumer. The consumer buys beer. The demand only slightly changes at the beginning of the game and then remains the same. The game is usually played over 40 periods and which each of the supply chain companies orders and delivers goods. The simulation is quite easy to play and very vivid.
Published in Chapter: The Bullwhip Effect in Supply Chains; From: Encyclopedia of Business Analytics and Optimization
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