The Beer Game :: GCSE Business Marketing Coursework

The Beer GameTo see how decisions at one part of a supply chain effect the over all told performance of a system, we ran a simulation called the beer game. The supply chain consists of a retailer who orders from a allocator who orders from a wholesaler who orders from a factory. At the beginning of from each one period, each stage of the chain orders upstream and receives the order shipped out to them two periods ago (the order they placed 4 periods ago) unless the next stage upstream is backlogged. all(prenominal) orders are eventually filled when inventory becomes avail subject. The holding terms condition for each location are (in $/keg.period) factory 0.25, distribution center 0.50, warehouse 0.75, and factory 1.00. Additionally, the penalty cost for a shortage is zero for all stages except the retail stores where the penalty cost is estimated to be $10.00 per keg/period. by and by trying many different strategies, the best policy I was able to come up with had a total cost of $122.00. This was achieved using pick 4, the base-stock policy. This policy re-orders a specified amount, less inventory on get hold of and pipeline inventory. The player specifies the base stock quantity for the retailer, warehouse, distributor, and factory. When this policy was apply at each point in the supply chain, the lowest cost strategy was achieved. Location Base Stock AmountCost sell 300 101.55Warehouse 210 10.21Distributor 210 7.70Factory 150 3.41Total 122.87Because the retail store encounters such a high penalty for shortages, it is best to financial backing them well stocked. They also have the highest holding overagecost, but at $1.00 it is only 1/10 of the shortage underagecost. If the overage and underage be were equal it would make sense to always order comely to anticipate having the mean (50) on hand. This policy is not optimal however, when it costs t he retailer more for a shortage than for excess.