15/11/2019

BEER
GAME
Supply Chain Management
2019

“The Beer Game is a role-playing simulation developed at

BEER GAME

Massachusetts Institute of Technology (MIT) in the 1960's to

clarify the advantages of taking an integrated approach to managing
the supply chain; it particularly demonstrates the value of sharing
information across the various supply chain components.”

Source: http://beergame.mit.edu/guide.htm)

(Play the slides in slideshow)

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ABOUT THE GAME

1. This game represents a simplified beer supply chain

(single retailer, single wholesaler, single distributor, single
factory).
(1)

2. The factory has unlimited raw materials and the other

parts of the supply chain have unlimited storage capacity.
3. Each “period” in the game will represent one round in the
business supply chain.
4. On each period, customers buy beer from the retailer’s
inventory (quantity of consumer demand is determined by
the game itself)
ABOUT THE GAME

5. Retailers are the only ones who know what the customers
actually order (they should not reveal this information to
(2)

anyone else.)
6. Each member of the supply chain, each period, places an
order with their supplier and receives a shipment from
their supplier.
7. The objective of the game is to minimize total costs for your
team. The team with the lowest total costs wins.

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Supplier
ORDERS SOLD TO
The Game Empty RAW
MATERIALS
CUSTOMER Board
Used
Order
Cards

Order Order Incoming Order Incoming Order Incoming Production

Cards Order placed Order placed Order Request
placed

Production
Delay

Current Current Current Current

Inventory Inventory Inventory Inventory
Production
Shipping Shipping Shipping Shipping Shipping Shipping
delay delay delay Delay Delay Delay Delay

Retailer Wholesaler Distributor Factory

Form a group of 5 consist of Retailer, Wholesaler, Distributor, Factory,

GAME SETTINGS

1.
and Supplier.
2. A moderator from the assistant will announce the change of period
and special cases related to the game. Each group will be accompanied
by 1 assistant.
3. Costs are computed in the following way:
• The carrying costs of inventory = $.50 per case per period.
• Backorder costs = $1.00 per case per period.
The costs of each stage (retailer, wholesaler, distributor, factory) for
each period, added up for the total length of the game, determine the
total cost.

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Games take place for 15 periods. Each period, every role in the supply
GAME SETTINGS

4.
chain must fulfil the demands from the downstream. All
unmet/unfulfilled orders will be considered as backorder and fulfilled
as soon as possible so that no orders are ignored.
5. Customer order is provided in “order cards” and must not be opened
until moderator say so in every change of period. The order can only be
opened by the retailer.
6. When an order arrives, the supplier must fill it with the available
inventory first. It takes 2 days lead time before the goods are arrived at
the consumer (production delay = 2 days, shipping delay = 2 days).
7. Each group will play according to the scenarios set (will be provided
later)

Initializing the
Game

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RAW
ORDERS SOLD TO MATERIALS
CUSTOMER

Used
Order
Cards Order Incoming Order Incoming Order Incoming Production
placed Order placed Order placed Order Requests

Order
Cards
Customer
Order
Retailer Wholesaler Distributor Factory
Current Current Current Current
Inventory Inventory Inventory Inventory

Steps of the
Game

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1. Receive inventory (cases) and advance shipping delays. Factory

advance production delay.
STEPS OF THE

2. Look at incoming orders and fill orders. All incoming orders plus
GAME

backorders must be filled. If your inventory is insufficient to fill

incoming orders plus backorders, fill as many orders as you can and add
the remaining orders to your backorders. Backorders are cumulative and
must be filled eventually when stock is available.
3. Record your inventory or backorders.
4. Advance the order slips; and the brewery brews. That is, the factory
converts the production request from last week into cases of beer and put
the cases (chips) in the first production delay.
5. Place and record your orders. Factory places and records its production
requests.

Steps per Roles

Steps 1 and 2 of previous
slides

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4 RAW
ORDERS SOLD TO MATERIALS
CUSTOMER

Used
Order 1
WEEK  
week 1
Cards Order
placed
Incoming
Order RETAILER
Order1
WEEK   2 Order Incoming Order Incoming Production
Cards placed Order placed Order Request

Customer Order
1. Receive cases from 2nd shipping delay to its (retailer’s)
Retailer Wholesaler Distributor Factory
inventory
Current 2. Pick the order card
Inventory Production
Delay
3. Flip the card and see the order
4. Put the card facing down in the designated place
5.
Current Fulfill customer order (putCurrent
chips over the orders sold to Current
Inventory Inventory Inventory
customers)
Shipping
delay
Shipping
Delay
Shipping
Delay
Shipping
Delay
Production
Delay

ORDERS SOLD TO week 1 RAW

MATERIALS
CUSTOMER

Used WHOLESALE
Order 1
WEEK  
Cards Order Incoming Order Incoming 1. Move cases fromR 1st shipping delay 2 nd
placed Order placed Order
shipping delay on the LEFT (in the
Order
WEEK  
direction from wholesaler to retailer)
Cards2
2. Receive cases from 2nd shipping delay to its
Retailer Wholesaler
(wholesaler’s) inventory
Distributor Factory

Current
3. Pick the incoming order card to see how
Current
Inventory
Inventory
much was ordered by the retailer
4. Flip the card and see the order
5. Put the paper facing down under the game
board
6. “Ship” the order to the retailer, moving the
cases to the 2nd shipping delay on the left

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1. Move cases from 1st shipping delay

to 2nd shipping
ORDERS SOLD TOdelay on the LEFT
week 1 RAW
MATERIALS
(in CUSTOMER
the direction from the
distributor to the wholesaler ) DISTRIBUTOR
Used
2. Receive
Order cases from 2nd shipping
Cards Order Incoming Order Incoming Order Incoming
delay to its placed
(distributor’s)
Order placed Order placed Order
inventory
Order
WEEK  1
3. Pick
Cards the incoming order card to

see how much was ordered by the

wholesaler
Retailer Wholesaler Distributor Factory
4. Flip the card and see the order Current Current
5. Put the paper facing down under Inventory Inventory
Current
the game board Inventory

6. “Ship” the order to the wholesaler,

moving the cases to the 2nd
shipping delay on the left

week 1
ORDERS SOLD TO
CUSTOMER
RAW
MATERIALS

Used
Order
FACTORY
Order Incoming Order Incoming Order Incoming Production
1.Cards
Move cases
placedfrom 1st shipping delay to
Order 2nd shipping
placed Order delay placed Order Requests
on the LEFT (in the direction from the factory to the
Order
distributor)
WEEK  
Cards 1

2. Receive cases from 2nd production delay to its inventory

3. Help to advance inventory with the factory area from 1st Factory
production delay to 2nd production delay space Current
Retailer Wholesaler Distributor Inventory
4. Pick the incoming order card to see how much was
Current Current
ordered by the distributorInventory Inventory

5. Flip the card and see the order

6. Put the paper facing down under the game board
7. “Ship” the order to the distributor, moving the cases to
the 2nd shipping delay on the left
4

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Record Your Inventory Or

Backlog
Step 3 of 5
Order = the amount of goods placed by you for your supplier.
Inventory & backorder is calculated cumulative.
Period Inventory Backorder Orders
1 12 0

Advance the Order Slips Step 4 of 5

RAW
ORDERS SOLD TO MATERIALS
CUSTOMER

Used
Order
Cards Order Incoming Order Incoming Order Incoming Production
placed Order placed Order placed Order Requests

Order
Cards
Customer
Order
Retailer Wholesaler Distributor Factory 4
Current Current Current Current
Inventory Inventory Inventory Inventory

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Place and Record Your OrdersStep 5 of 5 RAW

ORDERS SOLD TO MATERIALS
CUSTOMER

Used
Order
Cards Order Incoming Order Incoming Order Incoming Production
placed Order placed Order placed Order Requests

Order
Cards
Customer
Order
Retailer Wholesaler Distributor Factory
Current Current Current Current
Inventory Inventory Inventory Inventory

Place and Record Your Orders

Step 5 of 5
Order = the amount of goods placed by you for your supplier.
Used
Order Inventory & backorder is calculated cumulative.
Cards Order Incoming
placed Order
Period Inventory Backorder Orders
Order
Cards 1 12 0 4
Customer
Order 2

Current 3
Inventory
4

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REPEAT FOR
ALL PERIODS

Additional Information

1. If you have enough stocks for the period’s order you may choose to not order to
your upper stream supplier.
2. You must fulfil the period’s order, in case of out of stock, the orders will be
calculated as backorders and must be fulfilled later. If you are unable to fulfil
the order multiple times, it will accumulate the backorders which have higher
cost than carrying inventory.

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Scenarios for the

Game

No Scenarios Explanation

Without No communication between levels.

1
Scenarios

Communication

With You must communicate between levels in how

2 much the orders should be.
Communication

3 Batch Order Order can only be done in batch of 5 items.

Moderator will announce at the period when

the truck failed to deliver the goods because of
an accident. There will be no costs incurred by
4 Disruption the respective distributor. However, the
respective customer will automatically
incurred backorder.

First period will be the same for each of the scenarios as shown in previous slides: Initial inventory 12, Inventory in shipping
and production delay are 4, First incoming orders in each role (@4)

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Group Setting
GROUP SETTING

Scenario
No Group Assistant
Communication Batch Order Disruption
A1 A2
1 C1 C2 - - -
Q1 Q2
A3
2 C3 V - -
Q3 Q4
A4
3 C4 - V -
Q5
A5
4 C5 - - V
Q6

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Play The Game

week:
ORDERS SOLD

1 TO
CUSTOMER
Used
Order
Order Incoming Order Incoming Order
Cards
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

2 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

3 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

4 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

5
DISRUPTION!
TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
Truck from Factory to
Distributor is crashed Order
4 4
Cards
Customer
Order
1. Place an order
2. Move in-transit Current Current Current
Inventory
inventory Inventory Inventory

3. Fulfill the demand

4. Record your
inventory and
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

6
DISRUPTION!
TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
Truck from wholesaler to
retailer is crashed Order
4 4
Cards
Customer
1. Place an order Order
2. Move in-transit
inventory Current Current Current
3. Fulfill the demand Inventory Inventory Inventory

4. Record your
inventory and
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

7 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

8 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

9 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

10
DISRUPTION!
TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
Truck from wholesaler to
retailer is crashed Order
4 4
Cards
Customer
1. Place an order Order
2. Move in-transit
inventory Current Current Current
3. Fulfill the demand Inventory Inventory Inventory

4. Record your
inventory and
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

11 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

12 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

13 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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week:
ORDERS SOLD

14 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

week:
ORDERS SOLD

15 TO
CUSTOMER
Used
Order
Cards Order Incoming Order Incoming Order
placed Order placed Order placed
1. Place an order Order
4 4
2. Move in-transit Cards
inventory Customer
Order
3. Fulfill the demand
4. Record your Current Current
Current
inventory and Inventory Inventory Inventory
backorder

Retailer Wholesaler Distributor

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After the Game

Calculate Total Cost

At the end of the game, calculate the total cost of
15 periods and determine the winner!

Open bit.ly/BeerGameRecap

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Graph
1. Effective Inventory – Graph inventory period by period, showing
any backorders as negative inventory.
2. Orders – Graph your own orders, period by period. Factory will
graph production requests.
3. Perception on customer order – sketch what you think the
customer order looked like over time.

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