BEER GAME

Simulation 1

Team Factory Distribution Wholesaler Retailer Total inventory cost Total Backorder cost Total cost
1 9572 11032 1560 662 422 22404 22826

1. What was your inventory strategy in the initial stage of the game? Indicate if you have
stock out at the end of the game.

Retailer 1 (Sergi Pérez-Rejón): Since we were provided with data about our initial stock, the
receptions for the following two days, the lead time and the daily demand, I firstly decided to
apply the Distribution Requirement Planning (DRP) to try to improve and minimize the costs
incurred during the process. Nonetheless, as we were not given a minimum stock requirement, I
did not know if the demand would be constant or variable and so I could not manage to compute
the Safety Stock. So, in the beginning I tried to keep a more or less logical constant inventory
level. However, as demand suddenly increased from 4 to 8, and as my orders were not fulfilled
when desired, after 12 rounds I messed up my computations and I ended up in a situation where
I had no sufficient stock to supply the clients and I started to accumulate backorders. The worst
decision I could have made in that moment was to increase my orders so as to satisfy the new
demand and the backorders, however I guess that this was what started unbalancing the whole
supply chain progressively. In the final rounds, I started to receive large amounts of stock that
corresponded to all my past orders. Nonetheless, I guess I did not do so bad as I ended up being
the second best retailer of my seminar group!

Wholesaler 1:

Distributor 1:

Factory 1:

2. What are your comments on the dramatic fluctuations of the inventory levels? How can
these fluctuations diminish?

3. How do you think we could improve logistics after phase 1?

L'objectiu del primer semi era que cadascu obtingues els menors costs individualment, llavors
potser mires només per tu sense importar el que passi amb la resta, tot i que el problema es que
si no mires el proces com un conjunt, no només afectes als altres sino que tambe a tu mateix de
retruc. En la segona simualcio, com l'objectiu es minimitzar els costos totals del proces (retailer
cost + wholesaler cost + distributor cost + factory cost)

Now that we now about the existence of the bullwhip effect, we cannot ignore it. The problem
we faced on this first seminar is that we had lack of communication and therefore of
organization since we did not know who the actors at each stage of the supply chain were.

Collaboration is another crucial factor for trying to minimize total costs. The goal is to connect
end-to-end the supply chain, from the factory to the final consumer, and everything in between
will improve. We think that as collaboration between two nodes improves, for instance between
the retailer and the wholesaler, costs are reduced. Under teamwork, since we have data from
each stage, decision making becomes a joint effort that can help us achieve our the main goal.
Every time the demand forecast reaches our factory role in the game, the demand forecast is 6 to
8 times larger than the consumer demand at the store. Consumer demand is magnified the
further away you get from the retail shelf.