Welcome to the MIT Beer Game – Retailer
In this game, you act as a retailer within a beer supply chain.
Each week, customers place orders for beer. Based on this demand, you must decide how many units to order from your supplier.
You only have access to local information, such as your current inventory, outstanding backorders, and incoming deliveries.
You do not know future customer demand, and all orders and deliveries are subject to delays.
For example the units you ordered from your supplier (the Wholesaler) will not always arrive immediately the week after,
but could arrive in 2-3 weeks instead or even partially distributed over several weeks.
Your decisions therefore affect the system with a delay, and their full impact may only become visible several weeks later.
Objective
Your objective is to minimize total costs over the course of the game. These consist of:
-
Inventory costs: occur when beer units remain in stock
- A fixed storage cost of $200 per week applies
- Each unit in inventory incurs an additional $0.50 per unit
- Example:
You have 300 beer units in your current inventory:
300 x $0.50 + $200 = $350 total inventory costs for the week
-
Backlog costs: occur when customer demand cannot be fulfilled immediately
- Each unfulfilled unit incurs a cost of $1 per unit
- Example:
Customers ordered 400 beer units, but you had only 300 in stock. You now have 100 Units in your backlog:
100 x $1 = $100 Backlog Costs
Total Cost = $200 + (Inventory x $0.50) + (Backlog x $1)
Example:
You have 300 beer units in your inventory and a backlog of 100 beer units.
$200 + (300 x $0.50) + (100 x $1) = $450 Total Costs
Balancing these two cost drivers is the central challenge of the game.
Key characteristics of the game
- Demand is uncertain and cannot be predicted perfectly
- Information is limited to your own position in the supply chain
- Decisions have delayed effects, Orders may be delayed or split up
- Small ordering changes can lead to large fluctuations over time
- Every run will have different Demands and Delays
- You are the only human player, other positions are played by the computer
The game illustrates how coordination problems and delayed feedback can lead to inefficiencies in supply chains.
Dashboard
The dashboard provides an overview of your start-of-week situation (results from last week) to support this week's ordering decisions.
It displays, among other information:
- Customer orders: Orders placed by your customers last week
- Outbound deliveries: Units you sent to your customers last week
- Inbound deliveries: Units delivered to you by the wholesaler last week
- Outstanding orders: Orders you placed but have not received
- Inventory: Beer units you have in stock
- Backlog: Orders you have set aside because you had no more units in stock
- Costs: Last week's expenses (backlog costs + inventory costs)
- Your order decision: the quantity you choose to order from your supplier
The dashboard reflects only local information available to you as a retailer. It does not provide insight into future demand or the internal states of other supply chain members.