beergame.pdf

7/28/2019 BeerGame.pdf

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DEG - IST 2011 GCA Susana Relvas and Ana Carvalho, 1

Team Game

Beer Game

Goals

to have an essential and valuable experience to learnhow the supply chain works

to have fun


Introduction

Simulation game

The origin is dated in 60s and from MIT

Initially: physical game

Nowadays: PC and

online versions


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Introduction


4 teams per game = 4 chain entities

OBJECTIVE: Minimize Total Cost

Maintaining a lower inventory level

Satisfying all orders

Time horizon: 1 year (52 weeks) 1 item =

Rules


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Costs (per week)

Unitary storage cost: 5

Backlog cost for one unit: 10

Processing time intervals

2 weeks between shipments and deliveries

Information lead time 2 weeks between shipments and deliveries

Rules


In each round

We receive goods from our supplier

We receive orders from our customer

We order to our supplier

We send shipments to our customers

Decision: how much to order?

Rules


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How to play

http://scgames.bauer.uh.edu/

Preference for Internet Explorer 6, 7 or 8


How to playhttp://davinci.tamu.edu/beergame/v1/


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http://davinci.tamu.edu/beergame/v1/

How to play




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How to play




GCA


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How to play





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How to play



Results

Who has the fault??...

PC

our supplier

our customer

final consumer

our team

the system


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Results analysis

What happened to customer demand?

Several thousands of game analysis show that even if not allplayers place the same orders, everyone react approximately at thesame time.

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Demand(Units)

Time (Weeks)


Results analysis

What happened to customer demand?

Centralized Supply Chain- Second Week of Game


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Results Analysis

What cost the most?

Stockout

Place an higher order

Suplier did notaccomplished theorders

New supplier

Demand istricky

My orders aretricky

Remove uncertainty

New decisioncriteria

Delays in the systemcause problems

Different systemMinimize backlog

Cause - Effect


Results AnalysisDecentralized

Centralized

Day Tuesday Thursday

Team Game 1 Game 2 Game 3 Game 4

Factory 13380 2170 7265 3470

Distributor 11500 10535 15300 4975

Wholesaler 11370 10550 11205 8245

Retailer 4275 5045 2605 4960

Total 40525 28300 36375 21650

Placement 4th

2nd

3rd

1st

Day Tuesday Thursday

Team Game 1 Game 2 Game 3 Game 4

Factory 120 140 2575 925

Distributor 1115 3515 475 5 3110

Wholesaler 1045 2 820 489 0 2595

Retailer 725 1110 4455 1995

Total 3005 7585 16675 8625

Placement 1st

2nd

4th

3rd


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Results Analysis

Centralized Supply Chain

Decentralized Supply Chain

Bullwhip EffectReduction


Results AnalysisGame 1 Game 2

Game 3 Game 4


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Results Analysis

Game 1 Game 2

Game 3 Game 4

Lower Variability- > Lower Bullwhip Effect


Results Analysis What is the best integration strategy for this SC?

Supplier- Factory

Other Entities

Push-Pull Strategy


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Results Analysis

How many units should be kept as safety stock ?

LSTDz Safety stock:

Retailer:Standard deviation: 2.48 unitsService level 98%: 2.05Lead Time: 1 week

SS= 10 units => 10/8 = 1,3 weeks

Wholesaler:Standard deviation: 2.48 unitsService level 98%: 2.05Lead Time: 5 weeks

SStotal= 25 units SSWh = 15 units

Distributer:Standard deviation: 2.48 units

Service level 98%: 2.05Lead Time: 9 weeks

SStotal= 46 units SSDi = 21 units


Results Analysis

Local Optimization

What happens when you decide to optimize eachentity individually?

Global Optimization -> Reduce variability of orders

across SC


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Play for

Minimize costs and

How to perform a certain position in a system

Results emphasize:

Bullwhip effect

The value of information

Integration Strategies

Safety Stock Global optimization

Conclusions

beergame.pdf

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