Introduction to the Beer Game

Assignment 1st

Operation Management

“BEER GAME”

Submitted to

Profesor Jerry

Donghua University

Submitted  by

Pornnapat Toeyhom

student ID: 1333110104

Introduction to the Beer Game

        First of all I would like to briefly introduce the Beer game (or beer distribution game) was originally invented in the 1960s by Jay Forrester at MIT as a result of his work on system dynamics. While the original goal of the simulation game was to research the effect of systems structures on the behaviour of people (“structure creates behaviour”), the game can also be used to demonstrate the benefits of information sharing, supply chain management, and eCollaboration in the supply chain.

General structure of the game

        Since, I briefly introduce to the beer game move on to the simple structure of the beer game and to understand what each department do .  The task of each supply chain is to produce and deliver units of beer: the factory produces and the other three stages deliver the beer units until it reaches the external customer at the downstream end of the supply chain. In doing so, the aim of the players is rather simple: each sub group has to fulfil the incoming orders of beer. The retailer receives an externally predetermined customer demand and places orders with the wholesaler; the wholesaler sends orders to the distributor, who orders from the factory; the factory finally produces the beer. Hence, orders flow in the upstream direction, while deliveries flow in the downstream direction of the supply chain. as the figure 1, 2 show below.[pic 1]