Pla Ying the Beer Distribution Game over the Internet*

Possibly one of the most widely used classroom exercises for demonstrating the dynamics of a supply chain is the Beer Distribution Gaine. The System Dynamics Group developed the exercise at the Massachusetts Institute of Technology's Sloan School of Management (Sterman 1989). Normally the game is played manually on a game board with paper demand and order cards. Pennies are used to track the movement of cases of beer. This paper describes a version of the game that can be played over the Internet that has the advantages of quicker setup, quicker game play, and quicker analysis of game results. The Beer Distribution Game simulates a phenomenon known as the "bullwhip" effect. The classic example of the bullwhip effect was observed at Procter & Gamble (P&G) with the sales of Pampers diaper (Lee, Padmanabhan, and Whang 1997). While the consumers, in this case babies, consumed diapers at a steady rate, the variability of demand grew as it progressed up the supply chain. For instance when P&G looked at demand for raw materials to their suppliers, such as 3M, they saw large swings. Many additional examples of the phenomena have been identified in the literature. The manual version of the game is played on a board that represents the production and distribution of beer (see Figure I). Teams of students represent different parts of the supply chain. Players take on the following roles to simulate the supply chain echelons for each brewery: .the retailer sells cases of beer to a consumer and orders cases of beer from the wholesaler.the wholesaler sells cases of beer to the retailer and orders cases of beer from the distributor, and .the distributor sells cases of beer to the wholesaler and orders beer from the factory .