Beer Game Analysis

Good Essays
* Introduction:
The beer game is a simulation first developed at the Massachusetts Institute of Technology’s Sloan School of Management in the 1960s. This game was made in other to experiment how real organisations functions, where the consequences of every decisions play out as clearly as possible in the game as they would in a real organisation (Senge, 1990). Narayanan Arunachalam (2006) described the game as a popular classroom exercise for business schools conceived at MIT with the primary purpose of demonstrating industrial dynamics. The beer game is a “laboratory replica” of a real organisational setting, helps to highlight the possible disabilities and their causes of an organisation. The beer game however in this case was created to fail and highlight possible problems which an organisation may face in its supply chain which is the bullwhip effect. The game includes four players which include the retailer, the wholesaler, the distributor and the factory which is in an uplink setting. After playing the game, below we will be giving a detailed report of the events that took place at the course of the game.

* Data analysis:
The objective of the beer game is to minimize the total cost for everyone in the supply chain by maintaining low stocks and managing to deliver all orders (http://supplychain.mit.edu/games/beer-game, 2011). However, the game was created to fail and below is a summary of events that took place during the game.

Figure 1: Inventory/Backorder of the supply chain
During the course of playing the game, we followed the zero strategy which stated that “place zero orders upstream when your individual inventory is higher than demand”. This rule was largely what shaped the game and influenced the results in terms of inventory and backorders. The retailer had a considerable good start in the game with a good record in inventories of 12 units till week 5 when demand rose from customers and this caused the inventory rate to fall. In week 6,

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