Background Note | HBS Case Collection | June 1994 (Revised October 1999)

Beer Game, The: Board Version

by Janice H. Hammond

Abstract

The beer game is an exercise that demonstrates supply channel dynamics. Simulates the flow of material and information in a simplified channel of beer production and distribution, focusing on the linkages among a beer manufacturer, its distributors, a wholesaler, and a retailer. Students are organized into teams of four, each assigned to place orders and manage inventory for one firm in the channel. In this simplified channel, orders are the only information allowed to flow among channel participants. Despite the simplicity of the simulation, most teams find it extremely difficult to keep inventory and stockout costs low. The instructor can work with students to understand the nature of the problems they experience, identify the causes, and discuss possible remedies. The 90-minute exercise is played on game boards that are available from the Systems Dynamics Society (518-442-3865).

Keywords: Cost Management; Information; Distribution Channels; Production; Supply Chain Management; Problems and Challenges;

Citation:

Hammond, Janice H. "Beer Game, The: Board Version." Harvard Business School Background Note 694-104, June 1994. (Revised October 1999.)