Gabriel A Clarence

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Beer Game Supply Chain Management 2021

Beer game is a simulation game initiated by Massachusetts Institute of Technology (MIT) in 1960 that
could simulate and accommodate the flow of a supply chain system and/or the effect of information
sharing. In a game that involves customers, retailers, wholesalers, distributors, and factories, the
“players” will try to order the items per their “customer’s” request. In the process, several events could
occur, which includes but are not limited to:
 Backorder
A situation where a player does not have what the other player requested which results in the
process of reordering the said request to its supplier
 Lead time 2 in transit
In the first period, the customer would order an item from the retailer and it will be processed
by the wholesaler in the second period. The third period will involve the distribution of the said
item from the wholesaler to the retailer.

Game Setting
1. The class will be divided into 4 groups as mentioned above. The groups will be divided into
breakout rooms with an assistant and are given a spreadsheet to attend to.
2. Each group could not look at the other’s group spreadsheet.
3. Each group will experience 20 different periods with $0.50 carrying cost and $1.00 backorder
cost.

How-to-play
1. For each period, each group will discuss upon the amount of product that they will order and/or
produce. The decision will be processed by the assistant and delivered to the group’s “supplier”
2. The spreadsheet will contain general data to use as information such as:
 Carrying & backorder cost as stated  Current inventory
above  Backorder
 Period  Lead time
 Order
3. For the first period, each group will have the same amount of inventory.
4. Orders that are failed to be fulfilled are classified as “backorders” and are automatically updated
each period.
5. Lead time will signify the amount of period that an order requires to be fulfilled.
6. The inventory status will provide several information, such as:
 WIP (Production Process) : Procurement process from the group’s “supplier”
 On-Stock : The current inventory level
 In Transit (Delivery) : Distribution process to the group’s “customer”
7. To summarize the performance of the supply chain management, each group will have a
summary table that recapitulates the amount of order that are fulfilled, the amount of
backorders, the amount of inbound and outbound inventories, and the cost that has been used
throughout the period.
8. The performance summary would also be visualized in a graph to ease the analysts.