Group Presentation: Beer Game Supply Chain Performance Analysis

This assignment is a presentation analyzing the Beer Game, a supply chain simulation exercise. The presentation covers the core concepts of supply chain management, including the bullwhip effect, inventory management, and cost optimization strategies. It delves into the roles of various participants within the supply chain, such as retailers, wholesalers, distributors, and factories, and examines the impact of lead times, batch ordering, and information sharing on overall performance. The analysis includes a review of the game's dynamics, the causes of the bullwhip effect, and potential mitigation strategies. Furthermore, the presentation provides an overview of the importance of system dynamics, multi-step organizational layers, and overcompensating decisions within a supply chain. The goal is to convince the Board of Directors that the team has improved supply chain flow and should continue managing the supply chain. This presentation aims to convince the Board of Directors that the team has improved supply chain flow and that they should continue managing the supply chain.

Beer Supply Chain Game

Supply Chain Management
 Any activity that realizes the goal of customer request is supply chain.
 It includes different layer of participants i.e. retail, wholesale, distributor &
factory etc.
 Supply chain function within company:
 The role of supply chain is to realize the objective that are in regard to
fulfilling customers request.
 Function such as marketing, finance, operation, distribution, customer
service and production development are all work to fulfill customer
request.
 It’s a dynamic network system that requires continuous flow of
information that moves throughout the layer of supply chain.

Purpose of supply chain
 Buffering time- Time taken between finished products and reaching its
customer.
 Moderating distance log- Distance between the production facility and the
consumer place.
 Assortment- Two types
• Producer assortment- They produce large quantity but limited assortment.
• Consumer assortment- They wants to have small quantity with wider
assortment.

Characteristic of supply chain Management
 Task performance excellence- Satisfying customer needs at the minimum
cost.
 Building relationship with the other partners of supply chain.
 IT

Beer Game
Factory Distribution
WholesalerRetailer
1 week
1 week
1 week
1 week
Ashlon Structure
order order
o
r
d
e
r
order
order

Operating process
• Beer logistical operation
• Inventory Management
• Order keeping (Beer)

The Beer Game
• Week 0
Factory
Order
Inventory
Back Order
0
12
0
Distributor
Order
Inventory
Back Order
0
12
0
Retailer
Order
Inventory
Back order
12
0
Wholesaler
Order
Inventory
Back Order
0
12
0

Calculation for 0 week
• Beer sold at retail=$0/pallets
• Inventory carrying cost= $0@1$/pallets
• Back order cost= $654@2$/pallets
• Total cost=$654/Unit
• In every stage of the supply chain (for week 0) the inventory is 0, No order
is placed till now.
• My role is to manage the supply chain.
• The customer would place the order for the beer, and my job would be to
manage the inventory by minimizing the inventory cost. I would try to
avoid stocking out or else there would be high back order cost.
• The retailer now places the order for 4 pallets.

The Beer Game
• Week 10
Factory
Order
Inventory
Back Order
7
11
0
Distributor
Order
Inventory
Back Order
8
0
6
Retailer
Order
Inventory
Back order
0
13
Wholesaler
Order
Inventory
Back Order
8
0
14

Week 25
Factory 0
Order 0
Inventory 8
Booking Ord. 0
Distribution
Order 0
Inventory 19
Booking 0
Retailer
Order 0
Inventory 2
Wholesaler
Order 0
Inventory 12
Booking
Order 0

The Beer Game
• Week 33
Factory
Order
Inventory
Back Order
12
06
0
Distributor
Order
Inventory
Back Order
12
10
0
Retailer
Order
Inventory
Back order
9
0
Wholesaler
Order
Inventory
Back Order
8
9
0

Beer Game Exercise Is to demonstrate system dynamics
 Small deviation from the consumer end causes enormous deviation in the
rest of supply chain.