Beer Game and Its application



Beer Game and Its application

Beer Game

The Beer Game or the "MIT Beer Distribution Game" is a role playing game, in which the parties take different positions in a chain of distribution. The goal is to keep costs to a minimum of the overall chain. Since the individual parties focused on their information, which may not completely replace with each other. The result is that the system bounce very quickly, as did the bullwhip effect.

It was developed in 1960 at the Beer Game to the Massachusetts Institute of Technology(MIT) of the System Dynamics Group , led by Jay Forrester.

Description and Rules

Head of a game as a customer

Players: 4 parties (retailers, wholesalers, distribution center, brewery)

Commodity: beer crates

Storage costs: 0.5 monetary units (MU) per week and chest

Costs for delayed delivery: 1 GE per week and chest

Initial inventory: 12 cases each party

A game consists of 52 rounds (52 weeks)

Total time: 2 - 3 games (2-4 hours)

Different stages may only order and delivery quantities to communicate with each other. To describe the flow of goods, tokens or coins in the appropriate amount to be used. It also lists apply.

Schedule 1 to the column: Week, beginning inventory, receiving, delivery, end of period

Schedule 2 to the column: Week, ordering, delivery, delay

The participants of the Beer Distribution Games are assigned a role within a four-stage supply chain. We usually make (at least two-person) team, the position of either a brewery, a distributor (regional distributor), a wholesaler or a retailer. These sectors are arranged in series and all basically do the same job: meet in each round (one round = 1 week). The orders of the downstream customers get through work orders to the upstream supplier's own ability to deliver upright. Here are the issuing of orders and deliveries by sending the only type of communication that is allowed between stations. The retailer receives orders as per market demand by the GM, while the other players remains unknown. Agreements between the teams and other "tricks" are prohibited without exception, as this will undermine the intent of the game (McGarvey & Hannon, 2004).

The ordering policy of each team is not done arbitrarily, but follows the goal to keep the overall costs to a minimum level. The players are faced with two types of costs: storage costs and shortage costs. Whenever a unit of beer is in stock, it loses interest for the "invested" capital. These costs represent lost profits and a unit of money (or € 1) per bearing unit rated beer.The shortage costs amount to two units of money (€ 2) per undelivered unit of beer (Hugos, 2006).

As a result, the participants, they want to achieve victory that must follow an ordering policy in which they hold their own stock to as low as possible, but are not the same at a loss to meet unexpectedly large order quantities.

Supply in each round, brewery, distributors, wholesalers and retailers and their respective customers order from their suppliers. The ordered quantity to meet in a ...