Beer Game Analysis

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* 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…show more content…
Figure 2: Order chart Above is a chart showing the order levels of the Retailer, wholesaler, distributor, factory and customer. At the course of the game, due to the zero strategy, all supply chain operators had to make zero orders from week one to week 4, because demand was less than the inventory. The customer demand remained the same at 4 units until week 5. In week 5, demand from the retailer’s order rate had increased from zero to 16 while demand rose to 8 units compared to previous weeks. The orders of the wholesaler, distributor and factory remained zero in this week because they had high inventories. The decrease in inventories of the retailer resulted in the increase in order rates which was caused by a decrease in shipment which is a bullwhip effect. By week 11, all the supply chain operators had increased their order rate because their inventory levels were down. And back orders followed alongside changes in order changes which are all caused by the bullwhip effect. In week 21, the bullwhip effect were decreased which resulted to increased inventories and the zero rule coming in. * Issues that you encountered using the zero strategy: * Increase in Backorders: The biggest challenge we faced during the beer game was the challenge of constantly increasing backorders which can be seen in
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