Assignment

Beer Game

Submitted to: Submitted by:

Dr. Naveed Akhter Ejaz Rasool Dar

Class: Date:

MBA (D)-1 (1325102) 28-11-2013

Purpose: The purpose of this game is to know about the supply chain concept and to the effects decisions along the chain have on inventory levels and costs. Introduction: In this game the retailer sells cases of beer to a consumer and orders cases of beer from the wholesaler; the wholesaler sells cases of beer to the retailer and orders cases of beer the factory (brewery). The factory brews the beer. The beer supply chain is shown below:

Players of the game each take on a different role in the supply chain. The roles are the Factory, Distributor, Wholesaler and Retailer. Each position is directly linked, and beer cannot skip the adjacent position. For example, the Wholesaler orders beer from the Distributor, and ships beer to the Retailer. An important consideration in making decisions is the delay in the movement of beer through the supply chain. It takes three periods to move an order of beer between each player in the supply chain. If during period 3 the Wholesales decides to ship 10 cases of beer to the Retailer, the beer would take periods 4 and 5 to move to the Retailer and then would be available for sale by the Retailer at the beginning of period 6.

Similarly, orders are not visible to the upstream player for one period. For example, if the Wholesaler places an order in period 3, the order is received by the Distributor at the beginning of period 4.

Conclusion: By playing this game we became aware about the mistakes that was done at each level. First from the retailer their sales were 4 case and it increase suddenly and they order more cases from wholesaler without noticing why the demand is increasing as this brand is famous. Then at wholesaler level they also did not notice why the demand is increasing and they make their orders double at every order taking time. Same at factory level marketing manager did not focus on why our sales are increasing he just give order for more production and their inventory increases. It was marketing managers responsibility to do a search about the increasing sales of their product as there product was not among brand then why sales are increasing. The marketing manager is responsible for all of this because it is his duty to make their product success in the market. They should do the test marketing before launching of the product. The beer game is a role-play simulation game that lets us experience typical coordination problems of (traditional) supply chains, in which information sharing and collaboration does not exist. In more general terms, this supply chain represents any non-coordinated system in which problems arise due to lack of systemic thinking.