The Beer Game

The Beer Game

Length: 527 words (1.5 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
The Beer Game

To see how decisions at one part of a supply chain effect the overall performance of a system, we ran a simulation called the beer game. The supply chain consists of a retailer who orders from a distributor who orders from a wholesaler who orders from a factory. At the beginning of each period, each stage of the chain orders upstream and receives the order shipped out to them two periods ago (the order they placed 4 periods ago) unless the next stage upstream is backlogged. All orders are eventually filled when inventory becomes available. The holding cost specified for each location are (in $/keg.period): factory: 0.25, distribution center: 0.50, warehouse: 0.75, and factory: 1.00. Additionally, the penalty cost for a shortage is zero for all stages except the retail stores where the penalty cost is estimated to be $10.00 per keg/period.

After trying many different strategies, the best policy I was able to come up with had a total cost of $122.00. This was achieved using choice 4, the base-stock policy. This policy re-orders a specified amount, less inventory on hand and pipeline inventory. The player specifies the base stock quantity for the retailer, warehouse, distributor, and factory. When this policy was used at each point in the supply chain, the lowest cost strategy was achieved.

Location Base Stock Amount Cost
Retail 300 101.55
Warehouse 210 10.21
Distributor 210 7.70
Factory 150 3.41
Total 122.87

Because the retail store encounters such a high penalty for shortages, it is best to keep them well stocked. They also have the highest holding “overage”cost, but at $1.00 it is only 1/10 of the shortage “underage”cost. If the “overage” and “underage” costs were equal it would make sense to always order enough to anticipate having the mean (50) on hand. This policy is not optimal however, when it costs the retailer more for a shortage than for excess.

How to Cite this Page

MLA Citation:
"The Beer Game." 123HelpMe.com. 26 Jan 2020
    <https://www.123helpme.com/view.asp?id=46109>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The Beer Game Essay example

- The Beer Game To see how decisions at one part of a supply chain effect the overall performance of a system, we ran a simulation called the beer game. The supply chain consists of a retailer who orders from a distributor who orders from a wholesaler who orders from a factory. At the beginning of each period, each stage of the chain orders upstream and receives the order shipped out to them two periods ago (the order they placed 4 periods ago) unless the next stage upstream is backlogged. All orders are eventually filled when inventory becomes available....   [tags: GCSE Business Marketing Coursework]

Free Essays
527 words (1.5 pages)

Beer Game Essay

- Introduction The Beer Game is a role-playing simulation developed at MIT in the 1960's to clarify the advantages of taking an integrated approach to supply chain management. We have developed this computerized version of the Beer Game to make it easier to play the Beer Game as well as to illustrate certain Supply Chain Management issues which cannot be demonstrated by the traditional (non-computerized) Beer Game. This game is distributed with the textbook "Designing and Managing the Supply Chain" by D....   [tags: Supply Chain Management Business]

Free Essays
1985 words (5.7 pages)

Physics of Beer Pong Essay

- Do you have what it takes to become a beer pong champion. If so, you have come to the right place. In this step-by-step tutorial, I will reveal the secrets of miserably defeating your opponent at the sport of beer pong. When played in tournament, beer pong takes a great amount more physical, psychological, and intellectual endurance than many other sports. It may even take many years of practice to become a champion. Don’t assume that this game is not a blood thirsty sport either. Alcohol is related to 100,000 deaths annually in America, usually occurring after a night’s game of beer pong (Sage)....   [tags: physics beer pong drinking game]

Free Essays
2547 words (7.3 pages)

Business Analysis : Heineken Beer Essay

- Product Zaganu Is a 100% Romanian beer produce established in 2013 in a small town called Maneciu-Ungureni. The company produces 0.0039 million hectoliter of handcraft beer a year 100% Romanian ingredients there are 3 ingredients: water, malt and 3 types of hops and yeast. By using 100% Romanian indicant and everything is hand made such as bottle, label and stapling the bottles are done by hand. This helps them to sustain a competitive advantage. They produce 2 types of beer normal beer and a dark beer they have 2 different sizes that they can offer (0.5L) and (0.3L) the bottle and the label helps them sustain a completive advantage by giving them a nice designee and colorful label...   [tags: Beer, Brewing, Beer style, Malt]

Research Papers
1490 words (4.3 pages)

Dinking Game Rulebook Essay

- DRINK Instructions and Rules Objective The purpose of this game is to have fun and socialize with individuals while at a party or some other type of social event where individuals are consuming alcohol. Plus, it gives all those involved yet another reason to drink. Age: 21+ Number of Players: 3 to 8 Playing Time: As long as it takes for those playing to get bored. Equipment • One (1) Standard 52-card Deck of U.S. Playing Cards (No Jokers) • One (1) Twenty-Five Cent piece of legal U.S. Tender (A Quarter) per player • One (1) Ping-Pong Ball (Optional) • Two (2) Standard Plastic Keg Cups per player • Beer of Choice Set Up Location Players should sit or stand around a table....   [tags: Drinking Game Guide How To]

Free Essays
1557 words (4.4 pages)

Video Games : Video Game Industry Essay examples

- Maneth Chan Video game industry is part of our culture not just the U.S. but around the world. The 2014 video games industry has come far from it original days, the graphic, sound, play ability, story and many more. To me video games are kind of like math or food since you can relate to it anywhere around the world. Video games goes as far back as early 1950s, when academics began designing simple game and other thing as a computer science research. They weren’t popular until 1970s and 1980s when arcade, consoles, home computer game were introduced to the public, now days the graphic in the game industry have amazingly realistic to them, you can almost mistake them for real if you’re not c...   [tags: Video game, Video game industry, Arcade game]

Research Papers
1380 words (3.9 pages)

Beer Pong for Dummies Essay example

- Beer Pong for Dummies Throughout the many years, college students have engaged in many activities to either entertain themselves or pass endless time. These activities have ranged from sports, either intramural or varsity, to various clubs and organizations devoted to students personal interests. While these have sparked interest and lasted a long time, none has exceeded the expectations of the wonderful game of beer pong. As I began to think about ways on approaching this topic I became very excited, but realized that all my information could not be displayed all at the same time....   [tags: Research Papers]

Free Essays
3405 words (9.7 pages)

Essay about Miller Beer Ads

- Miller Beer Ads In television commercials and magazine ads, Miller uses sex, and woman as a way to grab your attention and to sell the product. We all have heard the saying “sex sells” but how far can alcohol companies take it. In their latest commercials, Miller uses two very attractive female twins that argue about to positive aspects for why they drink Miller. One argues she drinks it for the great taste and the other because it’s less filling. This leads to a fight between these two very sexy twins ripping each others clothes off and wrestling around in a fountain of water; they strip each other down to just their underwear....   [tags: Advertisements Advertising Alcohol Marketing]

Research Papers
1784 words (5.1 pages)

The First Bottle Of Beer Essay

- 1. Now, at the age of thirty-one, Milkman is planning to end his relationship with Hagar. He remembers how he felt about her when he was twelve and seventeen. Why is she now “the third beer”. Milkman considers Hagar the "third beer" because now in their relationship Milkman only stayed with Hagar and made love to her because she was there. Milkman no longer had any feelings or desire to pursue Hagar, only remaining with her for their sexual relationship. Hagar is like the third beer because she no longer produces that excitement and satisfaction for Milkman, comparable to the effects of a first bottle of beer....   [tags: Black people, White people, Race, Sitting Bull]

Research Papers
993 words (2.8 pages)

Essay Budweiser Beer

- The commercial, "The Bug," is an advertisement for Budweiser beer. It takes place in a barroom that is long and narrow, typical of such an establishment in any city neighborhood. The bar itself is on the right of the TV screen, with the required mirror on the wall behind it, and assorted bottles on the counter. The over-all color of the place is dark with a typical wood bar and the colors beige and green, in various shades. In the opening shot, the bartender is setting up drinks on the counter, with the first patron arriving, saying, "How ya doin'?" as he sits down at the bar....   [tags: essays research papers]

Research Papers
717 words (2 pages)

Related Searches

By trial and error, I found a base stock quantity of 300 units to minimize the cost to the retailer. The number may seem high but we must consider that on-order inventory will be subtracted to begin with. Because of the lead times in the system, the retailer will have three weeks supply on-order at any time. This amount will be subtracted out of the base-stock quantity before the order quantity id calculated.

The distributor and warehouse are better off with lower bases-tock numbers, mainly because they don’t incur any penalty cost for shortages. However, when they are short, the retailer is more likely to become short and incur the huge penalty fee for shortage. This will effect the chain in a negative way and so it necessary to balance the cost of the distributor and the warehouse paying holding fees and the retailer paying shortage penalties.

The factory is very similar to the distributor and the warehouse, except that it has a shorter lead-time and lowest holding cost. I found the optimal policy when the factory used a base stock quantity of 150. The shorter lead-time from the factory to its supplier enables them to respond better to changes in demand and reduced the chance of a stock-out.
Return to 123HelpMe.com