Beer Game
...tem it resulted in higher costs since there were now two sectors affected with a large backlog. b) Information limits: Since the system consists of four sectors only communicating through or-ders, these information limits prevent to jointly plan a strategy in the team. The information about the customer demand is also missing. Even at the wholesaler position we weren’t able to identify the real customer’s demand. Additionally, the limited communication supports diffi-culties in thinking as a system. You feel responsible for your own position to perform well. Thus, you are trying to minimize your cost at the cost of other sectors. c) Lead time: Firstly, every position can react on a demand change within three periods (one week order processing and two weeks shipping delay). If your supplier is on backlog you will get less. Secondly, orders placed by the retailer which are based on the actual demand have to pass the whole supply chain before they will arrive at the factory and afterwards the delivery has to pass the whole system again. These time delays provoke that the system isn’t capable of reacting flexible on changed demand rates. d) Planning and behavioral aspects: The situation of four decision-makers responsible for their own sectors (= local decisions) provokes that we focus under pressure on managing our part of the system, trying to keep our cost low without regards to impacts of the whole system. During the game we tended to extreme behavior (our “panic” order) which made the situation worse. By the way, the best strategy does not require a “central planner”: If each sector refills his inven-tory after delivery by just passing the customer’s order to his supplier, the initial inventory w...