What is the Beer Game?
The beer game is a widely used in-class game that is played in supply chain management
classes to demonstrate a
phenomenon known as the bullwhip effect. The game involves four players representing
four stages of a beer supply
chain: Retailer, Wholesaler, Distributor, and Manufacturer. Each player must decide how
many cases of beer to order
from its upstream partner, given the order quantity that it received in the current
time period.
The players’ goal is to minimize the total cost of the supply chain, but they cannot
communicate with their teammates
during the game. Moreover, in the basic version of the game, the players do not have
insight into the inventory levels
or ordering decisions at the other players—each player only has access to local
information.
The players’ goal is to minimize the total cost of the supply chain, but they cannot
communicate with their
teammates
during the game. Moreover, in the basic version of the game, the players do not have
insight into the inventory
levels
or ordering decisions at the other players—each player only has access to local
information.
Players go into the game with the goal of minimizing costs. The outcome of the game,
however, is usually a
demonstration of the bullwhip effect, which describes the increase in order volatility
as you move upstream in the
supply chain.
(What is the bullwhip
effect?) Instructors can use this result to discuss the importance
of supply chain
communication and visibility.
(How do I teach the beer game?)
The beer game was developed at MIT by Jay Forrester and others in the 1960s, eventually
taking its current form and
getting its name in 1973. (For a thorough history, see this article.) Early versions of
the game were played using
paper ordering slips and plastic chips or other markers to represent units of
inventory. Newer, computerized versions
of the beer game streamline the gameplay, automate the scorekeeping, and allow easy
visualization of the results.
The Opex Analytics Beer Game is completely free and can be used for educational,
entertainment, or research purposes.
The current version allows you to play on a team with three computerized players. Soon
you’ll also have the option to
play with three human teammates, like classic versions of the game. (This feature will
be available in an upcoming
release.)
The Opex Analytics Beer Game is the first and only beer game that lets you play with an
artificial intelligence (AI)
agent on your team.
(How does the AI
player work?) Or, you can let the AI play the game without you and
see who earns
the better score!
(How
do I face off head-to-head against the AI?) Our goal was to provide
a fun new interface to a
classic game while also demonstrating what’s possible when using AI for inventory
management and many other operational
problems faced in industry today. Give it a shot and let us know what you think!