The Beer Game Simulation

The Beer Game Simulation

Biggest Takeaway from the Simulation

The biggest takeaway from the simulation was that a wholesaler can only deliver what is available even though it may be less than what the retailer requested. For example, in one of the weeks, the retailer placed 150,000 bottles, but the retailer delivered 100,000 cases, leading to a backlog of 50,000 cases. Order backlogs are the monetary value of the orders that a company or retailer has not fulfilled (Barber & Hollie, 2021). They reflect an increase in customer demand and the amount of contractual orders that should be fulfilled (Sah & Banerjee, 2023). Backlog occurs even when there is stable customer demand (Senge, 2006). Therefore, the main cause of backlog in the supply chain is the wholesaler because wholesalers dictate the amount of stock that a retailer has to meet customer demands. I also learned that it is difficult to predict customer demand, thus increasing the risk of backlogs. Therefore, retailers should devise strategies to address backlogs before they pile up because too much backlog can create losses when customers decide to get the product from another retailer. Senge (2006) argues that retailers should control their urge to place orders when they realize an increase in backlog despite an increase in customer demand because an increase in backlog could create an impression that the company offers poor delivery services, leading to reduced competitive advantage. Retailers may also consider using multiple wholesalers to reduce the backlog.

A Specific Experience with This Type of Behavior

I have experience dealing with backlogs at my business. For instance, during the COVID-19 pandemic, the demand for our store’s products and services increased because we were the only neighbourhood store offering delivery services. One of the products that were in high demand at the store was sanitisers. At that time, our wholesaler experienced high demand from multiple wholesalers and issued orders on a first-come, first-served basis. This caused delays in our orders, and we often received fewer sanitisers than we had ordered, which led to an increase in backlog. We put most of our customers on hold and had to give them a discount for waiting for the product for so long to protect the store’s reputation.

References

Barber, R., & Hollie, D. (2021). Does order backlog matter for financial reporting quality? Evidence from revenue restatements. Advances in Accounting, 53, 100526. https://doi.org/10.1016/j.adiac.2021.100526

Sah, N., & Banerjee, A. (2023). Everything is in order! Order backlog and FX hedging. https://doi.org/10.2139/ssrn.4496940

Senge, P. M. (2006). The fifth discipline: The art and practice of the learning organization. Doubleday.

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Beer Game SimulationBeer Game Simulation
For this week’s Discussion Board, you will be asked to participate in the Beer Game Simulation, which can be accessed at the link below.
Harvard Business Publishing Education. (2012). Supply chain management simulation: Root beer game V2. Harvard Business Publishing.

Discussion Board

Unit 3 DB: The Beer Game Unit 3 DB: The Beer Game
Complete The Beer Game Simulation using the link provided. Discuss your biggest takeaway from the simulation. Describe a specific experience you have had with this type of behaviour, incorporating systems thinking concepts. Be sure to apply information from your readings in this unit to support your post. Include citations for any resources you use.
In response to your peers, assess the magnitude of their takeaways. Which takeaways are the most relevant to systems thinking, and which are ancillary?