Beer Game 啤酒游戏Time in Lab: 2 hoursObjective: 1) to understand the bullwhip effect in the supply chain; 2) to understand the way to deal with Bullwhip effect, in order to achieve supply chain coordination.1.IntroductionThe 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. Simchi-Levi, P. Kaminsky, and E. Simchi-Levi.2.The ScenarioThe Beer Game is a simulation, in which you, the player, are faced with the following scenario:In this exercise, you will be faced with the following scenario: Consider a simplified beer supply chain, consisting of a single retailer, a single wholesaler which supplies the retailer, a single distributor which supplies the wholesaler, and a single factory with unlimited raw materials which makes (brews) the beer and supplies the distributor. Each component in the supply chain has unlimited storage capacity, and there is a fixed supply lead time and order delay time between each component.Each week, each component in the supply chain tries to meet the demand of the downstream component. Any orders which cannot be met are recorded as backorders, and met as soon as possible. No orders will be ignored, and all orders must eventually be met. At each period, each component in the supply chain is charged a $1.00 shortage cost per backordered item. Also, at each period, each component owns the inventory at that facility. In addition, the wholesaler owns inventory in transit to the retailer, and the distributor owns inventory in transit to the wholesaler, and the factory owns both items being manufactured and items in transit to the distributor. Each location .is charged $.50 inventory holding cost per inventory item that it owns. Also, each supply chain member orders some amount from its upstream supplier. It takes one week for thisorder to arrive at the supplier. Once the order arrives, the supplier attempts to fill it with available inventory, and there is an additional two week transportation delay before the material being shipped by the supplier arrives at the customer who placed the order.The goal of the retailer, wholesaler, distributor, and factory, is to minimize total cost, either individually, or for the system.3.Running the SimulationNOTE: We have attempted to make the computerized version of the Beer Game faithful to the original version. Because of this, the sequence of events, particularly those relating to shipping and order processing delays, is a bit complicated. A careful reading of the description below will make the game clearer and more intuitive.When the Beer Game is started, the following screen appears:Figure 1: Beer Game InterfaceIn this simulation, you take the role of a manager of one of the components of the beer supply chain, either the retailer, the supplier, the distributor, or the factory. This will be called the interactive role. The computer takes the remaining roles. On the game display, the interactive role is displayed in color, and the remaining roles are displayed in gray. Also, the information for the interactive roles is displayed but the information for other roles is hidden (with the exception of backorder at the supply chain member immediately upstream from the interactive supply chain member). In the example screen displayed above, the distributor isthe interactive role. Also, by downstream, we mean the direction of the supply chain leading to the external demand, and by upstream, we mean in the direction of the factory. In addition, we refer to components of the supply chain as facilities.Order of events: the simulation is run as a series of weeks. Within each week, first the retailer, then the wholesaler, then the distributor, and finally the factory, executes the following series of events, as the simulation proceeds upstream:Step 1.The contents of Delay 2 is moved to Delay 1, and the CONTENTS of Delay 1 is moved to inventory. Delay 2 is 0 at this point.Step 2.Orders from the immediate downstream facility (or in the case of the retailer, external customers) are filled to the extent possible. Remember that an order consists of the current order, and all accumulated backorders. Remaining orders (equal to current inventory minus the sum of the current orders and backorder) are backlogged, to be met as soon as possible. Except for retailers, which ship orders outside the system, the orders are filled to the Delay 2 location of the immediate downstream facility. This is the start of the two week delay.Step 3. Inventory and backorder costs are calculated.Step 4. Orders are placed. If this is the interactive role, the user indicates the desired order amount. If this is one of the automatic roles, the computer places an order using one of several typical inventory control schemes.Delays and Order Filling: Note that this sequence of events implies several things. First, once an upstream facility fills an order, there is a two period delay before this material can be used to fill a downstream order. Also, there is a one period order delay. This means that if, for example, the retailer places an order for 5 units in this period, the wholesaler does not even attempt to fill the order until next period. This period, the wholesaler attempts to fill the order from the previous period. This can be considered a one period order processing lag. Thus, there is a total of three periods of delays between when a facility places and order, and when the results of that order arrive in inventory.Also, recall that there is no guarantee that an order will be met, even with that three period lag. An upstream supplier can only fill an order if it has the necessary inventory.Otherwise, it will backlog that order, and attempt to fill it as soon as possible. The exception to this is thefactory. There is no production capacity lime, so the factory's order will always be filled in its entirety after the appropriate delay.4.Understanding the ScreenEach facility in the supply chain is represented on the display. As an example, the Distributor is displayed below:On the left, the number of items in inventory is displayed. The next two elements (going from left to right) represent items in transit to inventory, that is, the numbers in the box labeled Delay 1 represent the number of items which will arrive in inventory in one week ,and similarly for Delay 2. The box on the right lists (1) the total inventory and shortage cost up to the current time; (2) the backorder, that is, the demands which have been received at this facility, but not yet met due to lack of inventory; and (3) the most recent order placed by this facility, in this example the Distributor, to its upstream facility, in this example the Factory. Note that in this case, backorder refers to orders received by the Distributor not yet met from inventory. To find out the orders placed by the Distributor which have been backlogged, that is, not yet met by the factory, check the backorder at the Factory. Also, the box recent order displayed here represents the most recent order sent by the Distributor to the Factory. There is a one week lag before this order arrives at the upstream supplier.5.Playing the GameTo start the game, select Start from the Play menu, or push the start button on the tool bar. The computer will automatically play the first round for the automatic facilities downstream from the interactive facility. For example, if the Distributor is the interactive facility, the computer will play for the Retailer and the Wholesaler, in that order.Once this is completed, the first round for the interactive facility is played. Steps one and two (advance inventories and fill orders, described in the section labeled Order of Activities) are completed. At this point, inventory numbers are updated on the screen, and the Order Entry dialog box appears. The screen looks as follows:Figure 2：The first round of the gameExamine this screen in detail. Recall (you can see this from the previous screen shot, on page 2) that the initial inventory was 4, and both Delay 1 and Delay 2 contained 4 units. This holds true for each of the supply chain facilities. Now, steps one and two have been completed. As you can see from the Order Entry dialog box, there is initially no backorder and no order from the Wholesaler. Since the starting inventory was 8 (the initial 4 plus 4 from Delay 1), 8 remain in inventory. Delay 2 is now empty. This is the first round, so there are no previous orders from the Distributor to the Factory, so the recent order box read 0. However, it this was a later round, and there was a order placed by the Distributor to the Factory in the previous round, it would appear in the recent order box.The Order Entry dialog box indicates how much total backorder and order was faced by the interactive player (again, in our example, the Distributor) in this round, and how much of it was successfully filled. Note that the backorder box (indicated by an arrow in the figure above) on the right side of the screen indicates the current level of backorder, while this dialog box shows the level of backorder at the beginning of this round, before the player (in this case, the Distributor) attempted to fill downstream orders (in this case, from the Wholesaler). At this point, enter a demand amount. This can be zero, or any other integer. Remember that you are trying to balance inventory holding costs and shortage costs.Also, by looking at the backorder box at your supplier (in this example, the Factory), you can see how much backorder your upstream supplier already has to fill. That is, how many items you have ordered in prior rounds but have not yet received..Once an amount has been entered, the remaining upstream supply chain members play automatically, and the screen isupdated. If you enter an order of 3 for the Distributor, the remainder of Week 1 play is carried out, and the Distributor portion of the screen looks like:The order of 3 is reflected in the recent order box.To play the next round, select Next round from the Play menu, or push the next round button on the tool bar. The computer again automatically plays the next round for the automatic facility downstream from the interactive facility. Once again, the order entry dialog appears. At this point, both Delay 1 and Delay 2 show an inventory of 0, since the inventory was advanced and Delay 2 was initially zero. Recall that after you input an order, the upstream supplier (in this case the Factory) will try to meet last period's order of 3. If you order 6 this period, and then the remaining upstream supply chain members play automatically, at the end of Week 2 the distributor portion of the screen will look like:Continue play by selecting Next round from the Play menu, or pushing the next round button at the beginning at each round. At any time, you can view a graph of your performance to date by selecting Player from the Graphs menu, or pushing the player graph button. This graph will display orders, backorder, inventory, and total cost over time. A sample graph follows:Figure 3: Performance of the player (distributor)6.OptionsThe Beer Game has many different options available to players.These were implemented to increase the player's understanding of many different aspects of supply chain management.For example, it is possible to switch from the default decentralized play to a centralized mode of play, in order to clarify the advantages of centralized supply chain management. Also, leadtime throughout the system can be decreased, in order to observe the effect of shortening lead time on system performance.Each of these options can selected using the appropriate commands .Each of the commands and options in the Beer Game can be selected from the menu. A list of menu commands follows:•File|Reset:This command resets the game. All data from the previous game is lost.•File|Exit : This command exits the Beer Game, and returns you to the Windows environment.•Options|Player: This command displays the Player Dialog and sets the interactive player to be the player selected.•Options|Policy: This command displays the Policy Dialog so that policies for each of the automatic players can be selected.•Policy DialogIn this dialog, policies and policy parameters for the computer-controlled players are selected. Six policies are available.Note that by inventory position in the following, we mean the sum of inventory at a location, backorder owed to that location, items being transported to that location, and backorder owed by that location.Figure 4: Inventory policies available in the gameo s-S When the inventory position falls below s the system places an order to bring the inventory position to S .o s-Q When the inventory position falls below s the system places an order for Q .o Order to S The system places an order to bring the inventory position to S .o Order Q The system orders Q .o Updated s The order up to level s is continuously updated to the following value: the moving average of demand received by that player over the past 10weeks (or fewer if 10 periods have not yet been played) times the lead time foran order placed by that player, plus M times an estimate of the standarddeviation of during the lead time (based on the same 10 week period). Whenthe inventory level falls below s , the system orders up to s . However, themaximum possible order size is S. Also, the ordering for the first four weeksis adjusted to account for startup by not ordering (or including in the movingaverage) demand during the first week at the wholesaler, the first two weeks atthe distributor, and the first three weeks at the factory.o Echelon This is a modified version of the standard echelon inventory policy. The value of s for each of the players is determined asfollows. Let AVG(D) be the ten week moving average of external customerdemand, let STD(D) be the standard deviation of that external demand, letsqrt(a) be the square root of a, and let L equal three in the regular game, andtwo in the short lead time game (described below). Then, at each period at eachstage, s is determined as follows:retailer: s = L * AVG(D) + M*STD(D)*sqrt(L)wholesaler: s = (L-1+L) * AVG(D) + M*STD(D)*sqrt(L-1+L)distributor: s = (2*(L-1)+L) * AVG(D) + M*STD(D)*sqrt(2*(L-1)+L)factory: s = (3*(L-1)+L) * AVG(D) + M*STD(D)*sqrt(3*(L-1)+L)When the inventory position falls below s , the system orders up to s . However, the maximum possible order size is S .In addition, the parameters s , S , Q, and M can be independently set for each player. Note that these rules have no effect on the interactive player.o Options|Short Lead Time: This command shortens system lead times by eliminating delay two from the system. Each lead time is thus shortened byone week.o Options|Centralized This command toggles between standard play and centralized play. In centralized play, the interactive player manages the factory. External demand can be observed, and the factory manager can react to it. In addition, when inventory reaches a stage, it is immediately sent forward to the next stage, so that inventory is only held by the Retailer. This implies that more information is available to the player, and that lead time is shortened, since there is no order delay at any stage except the Factory.o Options|Demand This command displays the Demand Dialog and sets the external customer demand. Demand Dialog: In this dialog, play can be switched between Random Normal and Deterministic demand. For the Deterministic Demand, a different constant demand can be selected for a number of initial weeks, and the remainder of play. Similarly, for Random Normal Demand, a different mean and standard deviation can be selected for the initial weeks, and the remainder of play.oFigure 5: Demand patterns available in the gameo Options|Global Information: This command displays inventory and cost information at all of the stages, not just the interactive stage. Also, this is the default setting for centralized play.o Play|Start: This command starts play.o Play|Next Round: Once play has started, this command continues play. Each week, this command must be selected in order for play to continue.o Graphs|Player This command displays a graph of orders, backorder, inventory, and cost for the current interactive player.o Graphs|Others : This command displays the Player Dialog and then displays a graph of orders, backorder, inventory, and cost for the selected player. PlayerDialog is for player selection, either to change the interactive player or for reportpurposes. Click on the player button or name to select a player, and then selectOK . To cancel the command, select Cancel.Note that if none is selected, thecomputer will take all of the roles, so that the player can observe the results.o Graphs|System This command displays a graph of cumulative orders, backorder, inventory, and cost for the entire system.o Reports|Player This command displays the Status Report for the current interactive player .o Reports|Other This command displays the Player Dialog and then displays the Status Report for the selected player.o This dialog is for player selection, either to change the interactive player or for report purposes. Click on the player button or name to select a player, and thenselect OK . To cancel the command, select Cancel .Note that if none isselected, the computer will take all of the roles, so that the player can observe theresults. Status report lists all orders placed by the player listed at the top of thedialog, as well as the mean and standard deviation of these orders.o Reports|System: This command displays the System Summary Report .This report summarizes the mean and standard deviation of orders placed by each ofthe players to this point, as well as the total cost experienced by each of theplayers. In addition, the total system cost is summarized at the bottom of thedialog.Deliverable（实验报告要求）:Each student is required to write a report about how he or she has understood the Bullwhip effect through playing different roles in the computerised Beer Game.Report Length: 2-3 pages (A4)。
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