Janice H. Hammond
Harvard Business School (694104-PDF-ENG)
June 13, 1994
The Beer Game is an exercise that demonstrates the dynamics of supply channels. Simulates the flow of materials and information in a simplified beer production and distribution channel, with an emphasis on the connections between a brewer, its distributors, a wholesaler, and a retailer. Students are organized into teams of four, each of whom orders for a company in the channel and manages inventory. In this simplified channel, orders are the only information that is allowed to flow between channel participants. Despite the simplicity of the simulation, most teams find it extremely difficult to keep inventory and stock-out costs low. The teacher can work with the students to understand the types of problems they are experiencing, identify the causes, and discuss possible solutions. The 90 minute exercise is played on game boards available from Systems Dynamics Society (5184423865).
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