Beer Game Report

803 WordsDec 21, 20114 Pages
BEER GAME DEBRIEFING The bullwhip effect 28/09/2011 Tiphaine Ribetto – st Perrine Trullemans – st112855 Background: "Beer Game" is a simple simulation of a Make-to-Stock Supply chain. The goal of this game is to minimize cost of capital employed in stock while avoiding out-of-stock situations. The issue here is how to forecast demand accurately. Tiphaine and I assume the roles of beer factory in the production department. As our work does not involve any decision in the order flow, our discussion will focus on our experience as manufacturer. Results analysis: * What happened to the order quantity as we move backwards, up the supply chain from retailer to manufacturer? And why? What happened during the first…show more content…
In theory this phenomenal (called bullwhip effect) should not occur if all orders exactly meet the demand of each period. The main issue in this game is that information about consumer demand is only passed up the supply chain through the orders that are placed. Information is systematically lost and result to high buffer stocks. The causes of this phenomenal can be divided into behavioral and operational causes: * What makes you change the order quantity each time? Why? (appendix 1 ) For most of the game we had a low average order size, which averaged to 4 units per week. However, the order size was not constant and oscillated from 0 to 14. Our team did his best to adjust product ordering according to the signals transmitted by up-streamed parts through customer orders. Often times we would order slightly more than what we actually thought we needed. This behavior could be justified in many ways. First, we did this to account for different occasions such as graduation. Next, we ordered more to fill inventory down the supply chain. Lastly, we occasionally ordered more when we had a "just in case" mentality. To an increase of customer order, we answered by placing more large orders. Such pathological incentives lead definitely to produce even more or less than the market demand and breaks definitely with the initial optimal market balance. If all supply actors act in such way, information about consumer demand is
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