The International Supply Chain Management

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4.782 International Supply Chain Management Group Assignment Zhou, Chi 20141533 Wang, Anqi 20142345 Word Count: 1. The theories of the game include supply chain management (Simchi-Levi, D. and Y. Zhao, 2003), supply network (Nigel Slack, Stuart Chambers, Robert Johnston, 2010), inventory management, reorder points (Wright, 2015), and Bullwhip effect (Wright, 2015). The game has 4 levels of supply chain: factory, distribution, wholesaler and retailer. The products could not be supplied over level. Each reorder has a minimum amount and there is a delivery lead time from a level to another. The costs include $10 per case inventory fee and $15 per case for back orders. Demand forecasting based on inventory control and reorder points increases the safety stock needed (Wright, 2015). It is very important to minimize the impact of demand fluctuation and the costs. 2. The four levels distribution system is very normal in reality. The retail level has direct contact with customers. They should know the customers buying behavior and be good at researching market and forecasting demand. Their forecasting is direct effect the whole supply chain and manufacture. As a most real information source, they have the responsibility to deliver the information to the supply chain. The wholesaler sees a large order followed by a quiet period and sees a distorted version of the actual requirement on the ground (Wright, 2015). They always need to handle large amounts of data from all their retailers and deliver the forecasting information to the next level. They should know the sale situation of their retailers and make their own forecasting. In this process, there is already an inevitable deviation between the customer demand and the fo... ... middle of paper ... ...er game.” In this exercise, participants take on the roles of customers, retailers, wholesalers, and suppliers of beer but are not allowed to freely communicate with each other. Instead, we must make ordering decisions based solely on orders from the next downstream player. Academic application of the beer game has consistently yielded common results: variability upstream is much greater than variability downstream. Such results imply that irrational decision making resulting from misunderstandings regarding inventory and demand information can cause the bullwhip effect (Bullwhip effect, 2015). The bullwhip effect is actually a product of reasonable decisions being made within a flawed supply chain infrastructure. In this context, four major causes have been identified: • demand forecast updating • order batching • price fluctuation • Inflated orders (WRIGHT).
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