Beer Game is a board game that contains 4 supply chain stages which are factory, distributor, wholesaler and retailer. In this game, fulfilling incoming orders with minimum cost is purpose of the players. In other words, game requires forecasting demand and ordering with respect to the minimum order quantity to accomplish minimum cost and maximum customer satisfaction.
I was a factory during the game who basically gives raw material order with respect to the forecasted demand and takes orders from the distributor to meet its demand. I encountered some significance problems during the game which were mostly related to the uncertain demand and high inventory which were not only factory’s problem but also other supply chain parts. Firstly, I
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In other words, increasing fluctuations in inventory in response to shifts in customer demand as one moves further up the supply chain. It also means that variability of demand increases when it moves up the supply chain away from the customer’s order. Therefore, small changes in orders causes large oscillations in supply chain parts. There can be several reasons such as lack of communication between supply chain partners, price fluctuations, order batching and updating demand forecast at each stage. In our game, lack of communication between supply chain parts and unknown customers’ demand are the main reasons of fluctuations in the effective inventory level. To mitigate these problems company should develop perfect communication strategy because with the help of the better communication between supply chain stages inventory holding cost and penalty cost can be minimized. In addition, if supply chain parts avoid updating demand forecast in each stage, probably there would be low cost because fluctuations can be decreased. If we were allowed to communicate with supply chain partners, there could be relatively low cost because we could arrange our order numbers, inventory level with the help of the effective information