Chapter 7: Supplement The Beer Game

The Beer Game Board and Initial Condition Figure 7A.1

The Beer Game Supply chain consists of four stages Factory Wholesaler Distributor Retailer Each stage is required to manage its inventory level through the placement of orders with its upstream supplier

Rules There is a two-week delay between the retailer, wholesaler, and distributor Production orders at the factory are available to ship three weeks after the production request Objective is to minimize the sum of your total weekly costs Only upstream communication are orders

Costs Weekly costs have two components Inventory cost Backlog cost Weekly inventory cost is $0.50/keg of beer in inventory at end of week Backlog cost is $1.00/keg on backlog at the end of the week

Initial Conditions Demand at the retailer stage have been stable at four kegs per week Every order in supply chain has been four kegs Each stage has maintained an inventory of 12 kegs Warmer weather is expected to raise demand Upcoming promotions are also expected to raise demand

Playing the Game Will be assigned to one of the four stages During play, will perform the five steps shown on the following slides Must be completed in order shown Each stage of supply chain must complete the tasks simultaneously Only the final task requires a decision

Step 1

Step 2

Step 3

Top of Data Sheet Figure 7SA.2

Steps 4–6