Beer Game Summary

(1) Explain your experiences in playing the beer game in class. Which position did you play? How did you decide your ordering pattern? What happened with your team?

Another team member and I played as the distributor in the beer game. We decide our ordering pattern by forecasting how many orders we will get from the wholesaler. Each time we made an order, we will check the inventories first and then we will look at our incoming orders. After we compared the current stock situation and the incoming needs, we will decide our order scale. The scale should be enough to meet the future needs of our customers, and, at the same time, minimizing our inventory cost.

During the first several weeks, we placed small orders in an attempt to get rid of some of the inventories. It seems work because our supply chain processed smoothly and the inventory were lower than before. However, when the demand increased suddenly in week 7 (probably week 7, I didn’t remember the records), we shipped all the inventories but still unable to fulfill the total order. Luckily, the backlogs were controlled in a limited number. In order to fill the pipeline, we increased our orders consecutively—forgetting that there is a delay before the pipeline is eventually filled. This fault leaded us to order and stock more beer than the demand in the market. In the final round (week 20-25), the demand started to decrease. But we still receive a lot of beer from the factory because of the delay. Our warehouse was finally overloaded with beer, which cost us a lot of inventory fees.

(2) Discuss how companies experience the bullwhip effect. What causes the bullwhip effect? What are some of the techniques that companies can use to mitigate the bullwhip effect?

Bullwhip effect refers to the effect that the amount of periodical orders amplifies as one moves upstream in the supply chain towards the production end. As we can see in the beer game, the retailer, wholesaler, distributor and factory have their...