The Beer Distribution Game: Notes and Instructions

I strongly urge each one of you to carefully study this game instruction in advance and familiarize yourself with the game prior to
playing. To not miss the fun of the game, I urge you to just play the game and not research it before hand.

The purpose of playing the beer game is to provide the participants with hands on experience on the challenges
in managing supply chains. The beer distribution game (or simply known as the Beer Game) is a role-playing
game, which simulates chaos, complexities, and structural problems in the supply chains. Of course, there is no
beer in the beer game, and the game does not promote drinking. This is 100% halal game ;). The beer game
simulates a supply chain of 4 different chains: retailer chain, wholesaler chain, distributor chain, and factory
chain. As in any supply chain, material flows from factory to retailers, and information flows from retailers to
factory.
1. Overview of the Beer Supply Chain system
In each SC, there are four-position stations (teams): retailer, wholesaler, distributor, and factory
Each position (team) is almost identical in its activity.
Each keeps an inventory of beer, shown by the big box
Each receives orders from upstream chain and ships beer to the downstream.
Each places orders of beer with the sector upstream.
There are shipping delays moving downstream and information order delays moving upstream
(represented by shipping delay smaller boxes between places). The factory has production delays to the
brewing process of the beer
Time: The game time periods in weeks, with a minimum of 30 weeks are recommended.
Decision period: decisions are made at each position at the beginning of each week
Orders are written in a papers, Beers are represented in coins/buttons: each buttons are one crate of beer.

Layout Picture of the Game

2. Basic Rules
Objective: The objective is to minimize total costs for your team. The team with the lowest cost wins the game.
Costs are computed in the following way:
o Inventory holding cost: $0.50 per case/week (case=krat)
o Shortage (backlog) cost: $1.00 per case/week. Backlog are lost, you cannot make up the previous
weeks backlog.
The cost at each position for each week will be added up to determine the total cost after the game ends.
No communication between chains: The retailer should not talk to anyone else, same for the wholesaler,
the distributor, and the factory. The only communication between positions should be through the
passing of orders and receiving of beer.
The retailer is the only one who knows what the customers actually order. They should NOT reveal this
information to anyone else, until after the post-game discussion.
Supply of raw material from external source to the factory is assumed to be infinite. Factory must
monitor external orders and internal orders. External orders are coming from distributor, the internal
orders are the production order that they control and deliver to the factory delays.
For retailers, the customer order are stacked in sequence, so do not shuffle customer order. The
stacking is required so all supply chain groups have the same variability in the room.
Initial Condition: There will be initially 12 chips representing 12 cases (crates) of on hand inventory of
beer in each position. There will be 4 chips in each shipping delay and production delay. See picture
below
Raw Materials

Customer

Customer
Order

Order
Placed

Incoming
Order

Order
Placed

Incoming
Order

Order
Placed

Incoming
Order

Production
Request Production
Delay

4
Wholesaler

Retailer

Shipping
Delay

Shipping
Delay

Shipping
Delay

Distributor

Shipping
Delay

Shipping
Delay

Factory

Shipping
Delay

Production
Delay

3. Steps of the game (Note: even if you familiar with the steps, please wait for each command)
Move the delays. For factory this is the production delay.
Open and read the incoming orders from downstream. For Retailer this is the customer order. For
factory there is addition reading order for the production order. Do not
Fill orders if any (i.e. satisfy demand as much as you can, you cannot hold any products). The factory
also fulfill the orders of the production orders in addition to the distributor orders.
Move the last week order slip to your upstream position (without opening). NOTE: Please do not read
this new incoming order, since this is for next week order fulfillment.
Place new current orders (order placed) (for your upstream position). for
Record incoming order, order fulfilled, backlog, your current inventory, shipping delay amounts, and
orders placed.
Wait for the Game-master Command to Restart the steps cycle
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4. Post-game Assignment (On the next Class Meeting)

Ada dua tipe assignment: Laporan Group dan Laporan Individual. Laporan
Definisi:
Kelompok adalah 1 kelompok Rantai Suplai. Stasiun adalah tim 2 orang yang mengelola 1 rantai (misalnya
stasiun pabrik, stasiun wholesaler, dst). Line Chart yang digunakan adalah X-Y
A. Tugas Kelompok
1 Untuk Setiap Rantai Stasiun:
Slide 1: Buat Line Chart dengan sumbu X adalah waktu (minggu 1, 2, dst) dengan sumbu Y adalah
beberapa garis untuk
(1) Inventory : garis warna hitam
(2) Backlog : garis warna merah
(3) Order Placed : garis warna biru
(4) Incoming Order : garis warna hijau
(5) Total Cost (inventory +backlog): garis warna ungu
In the slide page max discussion slides dalam powerpoint, observe your line chart graphics and discuss the
following in your paper,
o What happened at your station? And why?
o Do you think it is the other stations fault to cause the fluctuations?
o Did you use any generic ordering policy? If yes, what was your ordering policy?
o If you have experienced dramatic fluctuation in your demand/orders, what was the reason? Could
those fluctuations be mitigated? How?
o Do you see any pattern in the line graph?
Slide 2: Buatlah struktur pikiran anda sesuai dengan format
slide ini
Recommended Slide format are on the right (with title font 20
and slide font 14 ARIAL)

2. Untuk setiap Kelompok (Tim Supply Chain): Collect the All Station Assignment and
Slide 1 Create a Consolidated Line Graph dengan sumbu X adalah waktu (minggu 1, 2, dst) dengan
sumbu Y adalah unit krat untuk
a. Garis Order Placed dari Factory & Distributor & Wholesaler & Retailer & Customer Order
b. Garis (Total Cost per minggu)
Slide 2 Kesimpulan Kelompok
Apa yang anda rekomendasi bagi kelompok anda untuk mengurangi dampak fluktuasi ini?
B. Tugas Individual:
Buatlah sebuah tulisan esai maksimal 2 halaman untuk menjawab beberapa pertanyaan ini:
Fokus permainan beer game dalam berpikir sistem adalah memberikan pemahaman pentingnya untuk selalu
mendapatkan pemahaman terhadap struktur dibandingkan berfokus dengan kejadian atau juga pola perilaku saja.
Beer game memberikan sebuah media yang sangat baik dalam mengilustrasikan hal ini, sehingga selain tugas
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secara kelompok maka disarankan pula memberikan tugas individu untuk menjawab beberapa pertanyaa yang
bersifat reflektif terhadap pola berpikir:
1. Pada saat mengambil keputusan, mana yang anda lebih pentingkan? Backlog atau Jumlah Persediaan?
Mengapa?
2. Apakah ada unsur emosi dalam pengambilan keputusan anda (balas dendam, memberikan pelajaran ke
upstream yang tidak tahu diri, iseng bercanda dengan downstream, dsb)
3. Dengan memperhatikan gambar grafik garis yang and buat, apakah anda melihat ada pola pengambilan
keputusan yang anda ambil? (Hints: apakah ketika ada yang kurang anda panik? Apakah ketika ada yang
terlalu tinggi anda juga mengambil keputusan tertentu?)
4. Apakah ketika permainan berlangsung anda sadar bahwa ada struktur yang mempengaruhi pola
keputusan dan keputusan-keputusan yang anda buat? Apakah ada struktur fisik dan non-fisik? Coba
sebutkan komponen-komponen struktur dan deskripsikan struktur tersebut? (Hints: Bagaimana urutan
anda memproses komponen-komponen struktur menjadi sebuah keputusan)
5. Apakah ada batasan struktur yang tidak tertulis, bahkan tidak ada, namun seolah-olah ada dan timbul
melalui konstruksi anda sendiri dan membatasi anda?
6. Dengan pemahaman diatas, bagaimana rekomendasi anda untuk memitigasi fluktuasi demand dalam
setiap tingkatan (struktur, pola dan keputusan)?
7. Apakah ketika diumumkan bahwa permainan akan berakhir (yang ini berarti sebuah umpan balik) maka
apakah anda mengubah keputusan anda? Mengapa?
8. Apakah tujuan stasiun anda sama dengan tujuan tim? Apakah anda berpikir untuk mengorbankan tujuan
stasiun anda untuk meraih tujuan tim?

Beer Game's Position Worksheet

Your Position (Please Cross): Factory
Important Notes: Inventory Cost $0.50 and Backlog Penalty Cost $1.0

Wk

Wholesaler

Distributor

Retailer

You cannot talk to the people beside you (on your left and right), information can only be passed through the order cards
You are forbidden to know the customer demand, or any other demand that is not you direct downstream (exception is for Retailer only)
Reminder: Order Placed are the one that you order for next week, not the previous week, however incoming order is downstream order for this week

Incoming
Order

Order
Shipped

BackLog

Current
Inventory

Shipping
Delay -1

Shipping
Delay -2

Order
Placed (For
Next Week)

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Write Your Name and (NPM) here: _______________________________ and Your TeamMate: _________________________________