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Chapter 7: Supplement. The Beer Game. The Beer Game Board and Initial Condition. Figure 7A.1. The Beer Game. Supply chain consists of four stages Factory Wholesaler Distributor Retailer - PowerPoint PPT Presentation
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Copyright 2013 John Wiley & Sons, Inc.
Chapter 7: Supplement
The Beer Game
7A-2
The Beer Game Board and Initial Condition
Figure 7A.1
7A-3
The Beer Game
• Supply chain consists of four stages1. Factory2. Wholesaler3. Distributor4. Retailer
• Each stage is required to manage its inventory level through the placement of orders with its upstream supplier
7A-4
Rules
• There is a two-week delay between the retailer, wholesaler, and distributor
• Production orders at the factory are available to ship three weeks after the production request
• Objective is to minimize the sum of your total weekly costs
• Only upstream communication are orders
7A-5
Costs
• Weekly costs have two components1. Inventory cost
2. Backlog cost
• Weekly inventory cost is $0.50/keg of beer in inventory at end of week
• Backlog cost is $1.00/keg on backlog at the end of the week
7A-6
Initial Conditions
• Demand at the retailer stage have been stable at four kegs per week– Every order in supply chain has been four kegs
• Each stage has maintained an inventory of 12 kegs
• Warmer weather is expected to raise demand• Upcoming promotions are also expected to
raise demand
7A-7
Playing the Game
• Will be assigned to one of the four stages
• During play, will perform the five steps shown on the following slides
• Must be completed in order shown• Each stage of supply chain must
complete the tasks simultaneously• Only the final task requires a decision
7A-8
Step 1
7A-9
Step 2
7A-10
Step 3
7A-11
Top of Data Sheet
Figure 7SA.2
7A-12
Steps 4–6