Question

1.Please give me an actual samples of Bullwhip Effects during playing the MIT Beer Game.
2. Please provide figures and graphs based on the results of your game.

Answer 1

First we have to know about the bullwhip effects so this is the name of this game is coined by Procter & Gamble when they perceived erratic and amplified order patterns in its supply chain for baby diapers. Bluewhip effect is bascially describes how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels. In supply chain management, customers, suppliers, manufacturers and salespeople all have only partial understanding of demand and direct control over only part of the supply chain, but each influences the entire chain with their forecasting inaccuracies (ordering too much or too little). A change in any link along the supply chain can have a profound effect on the rest of the supply chain. There are also many contributors and causes which can create a bullwhip effect in supply chain management. Some of the contributors which can trigger bluewhip effect are as follows under.:

• Lead-time issues such as manufacturing delays
• Less-than-optimal decisions made by supply chain stakeholders at any point along the chain, for example, customer service or shipping
• A lack of communication and alignment between each link or stakeholder organization in the supply chain
• Over- or under-reacting to demand expectations, such as ordering too many units or not enough
• Customer companies, often retailers, waiting until orders build up before placing orders with their suppliers, a practice called order batching
• Discounts, cost changes and other price variations that disrupt regular buying patterns
• Inaccurate forecasts from over-reliance on historical demand to predict future demand

Blue whip effects can be costly to all the organizations . Excess inventory can result in waste, while insufficient inventory can lead to reduced lead time, poor customer experience and lost business.so let us discuss about the beer game it is made by MIT Sloan school of management it is also called beer distribution game. In this game we have to simulate beer supply chain using mainly four players namely manufacturer, retailer , wholesaler and consumer. The goal is keeping operating costs as low as possible and teams are penalized for having too much inventory.Players can only communicate by relaying orders through the normal channels, mimicking a real-life supply chain, and they must deal with inventories and backlogs, and their impact on the bottom line. Among its lessons, it illustrates the complexity of the system as a whole, the difficulty of making correct choices with limited information, and quickly brings to life the bullwhip effect in action.

So now we can play the beer distribution game so in this game we that the game is played between the Retailer, Wholesaler, Distributor, and Factory. The retailer sells barrels of beer to a consumer and orders barrels of beer from the wholesaler, the wholesaler sells barrels of beer to the retailer and orders barrels of beer from the distributor and the distributor sells barrels of beer to the wholesaler and orders beer from the factory (brewery).

Each player is directly linked, and beer cannot skip the adjacent position. For example, the Wholesaler orders beer from the Distributor, and ships beer to the Retailer. The goal of the game is to minimize team total costs — each barrel of beer has a cost, which is calculated at the end of the game. Information Flow proceeds from Retailer to Factory; Material Flow proceeds from Factory to Retailer.