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• Conventional board
game Beer Distribution
Game
Delay Delay Factory Delay Delay Distributor
Delay Delay Wholesaler Delay Delay Retailer
Orders
Material
Please use “Internet Explorer”
The Beer Supply Chain
The beverage syrup is manufactured in the Factory
The syrup is shipped via rail to distribution centers (bottling centers)
From the bottling centers it is sent to a wholesale site. Finally, the cases are
trucked to the retail outlet.
We just look at the single linear chain.
An important consideration in making decisions is the delay in the movement of
beer through the supply chain.
• If during period 3 the Wholesales decides to ship 10 cases of beer to the
Retailer (upon whose request),
• 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.
• It will take longer if one site does not have enough on-stock/inventory
t t+1 t+2 t+3
Shipment
Shipment
t -1
In period 2 (t-1), the Retailer places 10 cases, period 3 (t) the Wholesales receives
the order and decides to ship 10 cases to the Retailer. Then, the Ret. Receives and
can use these 10 cases for meeting demand in period 6 (t+3).
4
Events in each period
Receives Beer (after Information/Shipping Delay) Receives Orders from Downstream (after Inf./Mail Delay) Ships Beer Downstream to meet Orders * (pull -- responsive)
Orders Beer from Upstream (the only decision) * If the immediate upstream has stock!
Each Stage:
Distributor
In each period, every participant follows the same cycle:
After your decision,
1. The system is updated by me where new orders and
shipments are received, shipments enroute are advanced, and
inventory levels and backorder positions are calculated (these
tasks are done automatically).
2. The player updates the status screen and reviews current
position/status.
3. A shipping decision is made according to new orders and
backlog, subject to inventory availability,
4. An ordering decision is made for more beer.
Game
Login • Each student takes
on a different role.
http://www.pom.edu/
4
• Each student takes on a different role. Retailer, or
Wholesaler, or
Factory
4
• Each student takes on a different role.
Quant’ty
you order
Retailer, or
Wholesaler, or
Factory
“Status”
“Graph”
Quant’ty you
ship to your
customer
Player
Screen
• Students make decisions each period.
• Individual and team evaluations.
In each period, every participant follows the same cycle:
After your decision,
1. The system is updated by me where new orders and
shipments are received, shipments enroute are advanced, and
inventory levels and backorder positions are calculated (these
tasks are done automatically).
2. The player updates the status screen and reviews current
position/status.
3. A shipping decision is made according to new orders and
backlog, subject to inventory availability,
4. An ordering decision is made for more beer.
Costs • Holding one case of beers per week costs you $0.5; if you have
24 cases at the end of period 9, then total cost = $12
• Backlogging one case per week costs you $1.0; if you have 45
shortage on book at the end of period 12, the total cost =$45
Backlogging/backorders occur when you do not have stock to ship the
required quant. by your customer in the current and/or earlier periods.
1. In period 16, you (retailer) ship 6 for demand of 12, then you have
backorders of 6.
2. In period 17, new demand of 10 comes, but you do not have any stock,
then you have cum. backorders of 16.
3. In period 18, you receive a shipment of 20 cases from W/H and another
new order of 8 cases, then your backorders = 16+8-20 =6: shipping out 20
• Make sure you ship when you have inventory!!!
Game
Login • Each student takes
on a different role.
http://www.pom.edu/
Things to Keep in Mind
• Cost – Inventory & Stockout
• Goal – Minimize Costs
• Delays
• No Communication within the Team
Bring up decision screen….
Playing the Game
• Two decisions each period – How much to
ship? How much to order?
• Must click on “Submit Button” to enter
decision.
• Must click for status update – after I
advance the game
Play a few rounds to get the hang of it…
Debrief
• What happened?
• Variance in Orders
• Inventory/Shortages – Feast or Famine
• What was the actual demand at the retailer?
• Enjoy!
•
1. It takes 2 periods to move an order of beer between two players.
• In period 3, Wholesales decides to ship 10 cases of beer to
Retailer, the beer would take periods 4 and 5 to move to
Retailer and then
• The 10 cases would be available for sale by Retailer at the
beginning of period 6.
2. Orders are not visible to the upstream player for 1 period. For
example, if the Wholesaler places an order in period 2, the order is
received by the Distributor at the beginning of period 3.
• Thus, it takes (at least) 4 periods to get order fulfilled.
Internet/Web-base
Beer Game
21
22
1. Transport
2. Inventory count
3. Order seen
4. Fulfill order
5. Place order
1 2
3
4 4 4
4
23
For each period of play, every participant follows the
same cycle:
1. The system is updated by your instructor where
new orders and shipments are received, shipments
enroute are advanced, and inventory levels and
backorder positions are calculated (these tasks are
done automatically by the server program.
2. The player updates the status screen and reviews
current position.
3. A shipping decision is made according to new
orders and backlog, subject to inventory
availability,
4. An ordering decision is made for more beer.
5. There are only two costs involved in this
simplified version of a logistics supply chain:
inventory holding cost ($1.00/case/period) and
back order costs ($2.00/case/period).
6. Each team has the goal of minimizing the sum of
these costs by balancing the cost of having
inventory (inventory holding cost) with the cost
of being out of inventory when a customer
orders beer (back order cost).
Action The game begins with a fully-loaded "pipeline" of
cases of beer:
• 16 cases of inventory in each position's "current inventory,"
• 4 cases in each of the "production delay" pipeline,
• 4 cases in each of the "shipping delay" pipeline,
• each position has an initial order for 4 cases of beer.
Definitions The following terms are used in the status report:
1. Current Demand - This is the demand for the current period at
this position (-location). For the Retailer, this demand is
determined by an external demand stream. For all other
positions, this demand reflects an order placed by the
downstream position in the supply chain during the previous
period.
2. Backorder - This is the demand that has not been met to date at
this position. When a position does not meet demand by
shipping cases of beer, the backorder amount is increased. This
amount does not include the demand during the current period.
1. Current Shipment - This is the amount that is being
shipped to the downstream position during the current
period.
2. On Hand - This is the current amount in inventory at the
position. This is the total amount that can be shipped
this period from this position.
3. Due Next Period - This is the number of units that are
scheduled to arrive at this position next period.
4. After the ordering and shipping decisions have been
made, the "status" button can be used to update the
status report. The status report will reflect the current
order and shipment decisions. Remember that after the
instructor has updated the system, the "status" button
should be pressed again to receive a report that reflects
the execution of the decisions for the previous period.
1. Due In Two Periods - This is the number of units that are scheduled
to arrive in two periods.
2. Current Order Release - This is the number of units that are being
ordered from the upstream position. The upstream position will not
see this order until after the system has been updated to the next
period.
3. Inventory Cost - This is the cumulative inventory cost for this
position. This is calculated from the actual inventory balance at the
end of each simulated period. During the update process, the system
first ships material to the downstream position, updates the
cumulative inventory and backorder costs based on the inventory
and backorder levels, and then receives new material into the
position.
4. Backorder Cost - This is the cumulative backorder cost for the
position.
5. Total Cost - This is the total cumulative cost for the position.
Each position can communicate orders via the Web form only. No
other form of communication is allowed between positions.
Instructor
Screen • 2-4 period practice
session.
• Play game for 30-35
periods.
• 30-45 seconds per
period.
Debrief
Graphs
• Entire game and
debrief can be
completed in one
75 minute class.