Beer Distribution Game
The demand planning that is often carried out in isolation by the actors in a value creation chain, generates a so-called bullwhip effect. This manifests itself in larger and larger fluctuations in the order quantity, the further a company in the value chain is away from the final customer. The effect is mainly due to delays in material and information flows. As a result, there are inefficiencies at each stage of the value creation chain due to estimation errors that influence the size of the company's stock. In this, a stock that is too high leads to capital lockup costs and warehousing costs, quality and freshness problems, loss of value as well as theft, while a stock that is too low leads to delivery bottlenecks or "out-of-stock" situations (empty shelves). In order to reduce fluctuations in the value creation chain, a central task of the SCM is to lessen the bullwhip effect.
To illustrate the effect of the bullwhip effect, the Beer Distribution Game was developed back in the 1960s at MIT. This game simulates a simple value creation chain with four players (the brewery, the distributor, the wholesaler and the retailer). A one-time increase in consumer demand regularly leads to a buildup in order quantities in the supply chain - regardless of whether the game is played by experienced managers or students.
The aim of the research project is to develop a generic simulation framework based on the idea of the Beer Distribution Games, with which real (multilevel) supply chains can be modeled according to the "modular principle" in order to be able to simulate and then evaluate the effects of the use of innovative information technologies and management concepts. The framework will be used in teaching in order to introduce the students to the essential connections in complex value creation networks in an interactive manner.