The Beer Game

The Beer Game is the classic business game in system dynamics, demonstrating just how tricky it can be to manage a seemingly-simple system with delays and feedback. It’s a great icebreaker for teams, because it makes it immediately clear that catastrophes happen endogenously and fingerpointing is useless.

The system demonstrates amplification, aka the bullwhip effect, in supply chains. John Sterman analyzes the physical and behavioral origins of underperformance in the game in this Management Science paper. Steve Graves has some nice technical observations about similar systems in this MSOM paper.

Here are two versions that are close to the actual board game and the Sterman article:

Beer Game Fiddaman NoSubscripts.zip

This version doesn’t use arrays, and therefore should be usable in Vensim PLE. It includes a bunch of .cin files that implement the (calibrated) decision heuristics of real teams of the past, as well as some sensitivity and optimization control files.

Beer Game Fiddaman Array.zip

This version does use arrays to represent the levels of the supply chain. That makes it a little harder to grasp, but much easier to modify if you want to add or remove levels from the system or conduct optimization experiments. It requires Vensim Pro or DSS, or the Model Reader.

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