Supply Chain Game Simulation Game

Last week, we played a Beer Game which is a role-play simulation game. The game let participants experience to some coordination problems of supply chain, during the game participants are not allowed to make collaboration and share information with each other. There are four positions in the game which are retailer, wholesaler, factory and distributor. In our group there were five people, two people were in retailer position and I was one of the retailers.
As a retailer, we had encountered some kind of problems during the game. The duty of the retailer is predicting the demands and giving new orders to the wholesaler in order to meet the demand. First three weeks demand was 4 and then it started to increase to 8 and it stayed stable at 8 to

Charts showed that the total cost of the supply chain is $1,335.50 and its $690.50 is belonging to the cost of retailer. Most costly position in supply chain is retailer and this indicates that the one to blame for all that has happened is retailer. As a retailer, first we tried to keep our order low because our inventory was enough to satisfy the demand. From the 9th week, our inventory was no longer enough to satisfy the demand and we started to experience a backlog, to handle this problem we started to give higher orders. Demand continued for a long time as 8, but because of the demand was unknown before giving the order, we assumed that it would be increased instantly, thus we continued to give much higher orders. The reason that we gave much higher orders was to avoid the possibility of experiencing backlog. We preferred having high amount of inventory rather than experiencing a backlog. The reason of our this preference is; the cost of each inventory is $0.5 while the cost of each backlog was $1.00, so we thought that having much more inventory would be better rather than backlog in order to keep our cost as low as possible. After realizing that

‘’The bullwhip effect can be explained as an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance then the sales to the end customer. These irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations.’’ (Aalhysterforklifts.com.au, 2012) Disorganization and the lack of communication between each link in the supply chain are one of the contributors to the bullwhip effect, which are the same problems that we faced during our supply chain process. To mitigate this effect, the most proper strategy should be found and applied to the supply chain and this strategy should be consists the best level of communication. The game that we played clearly show that, because of our lack of communication we were not able to become organized and it affects our cost of supply chain. If we were allowed to communicate during the game, we could find an opportunity to arrange our orders and our inventory level, and if we were able to make information-exchange our cost could be visibly lower than