2012 Utah Operations Winter Conference
The Supply Chain
Simulation Game
Gal Raz
Darden School of Business, University of Virginia
Supply Chain Management Elective
Jan 18 (Wed)
Jan 19 (Thu)
Jan 25 (Wed)
Jan 26 (Thu)
Introduction to
Supply Chain
Management
Supply Chain
Network Design
(K&S)
Data Rich
Management
(SEJ)
Feb 2 (Thu)
Feb 8 (Thu)
Feb 15 (Wed)
Feb 16 (Thu)
Feb 22 (Wed)
Sourcing from an Ops
/ People Perspective
(K&S China (B))
No Class
Aligning Incentives in
Supply Chains
(Blockbuster)
The Negotiations
Exercise (Uncle
Coco Magic shop)
The Supply Chain
Game – Part 1
Feb 23 (Thu)
Feb 24 (Fri)
Mar 1 (Wed)
Mar 8 (Wed)
Mar 9 (Thu)
The Supply Chain
Game – Part 2
The Supply Chain
Game – Debrief
Recycling and
Reverse Logistics
(Sandvik)
Green ProductService Systems
(Netafim)
Green ProductService Systems
(Better Place)
Outsourcing and
Offshoring
(Timbak2)
Feb 1 (Wed)
Sourcing from an Ops
/ People Perspective
(K&S China (A))
* The Negotiation Exercise on Thursday February 16th and the Supply Chain Game on Wednesday and Thursday February 22-23
will be from 2:45pm to 4:45pm and thus there will be no class on February 8
The SC Simulation Game
Main Learnings

Managing a global supply chain that competes by
making timely decisions of pricing, ordering, and
logistics that impact both the market and competitors

The impact of supply chain contracts on supply chain
and individual firm performance

Negotiation under asymmetric information

Supply chain strategy (responsiveness versus efficiency)
The SC Simulation Game
Procedure

The game is played with competing teams of 4–8
players

Each team has four roles: a Retailer, Wholesaler,
Distributor, and Manufacturer

The game is played for up to 96 weeks (2 simulated
years)
The flow of product and orders
Customers
Manufacturer
Distributor
Wholesaler
Retailer
 Manufacturing and transport takes 1 or 2 weeks.
 Orders are received immediately
The Decisions

Weekly:



Quarterly:


Order quantity
Mode of transportation (trucks vs planes)
Retail Price
Half Yearly:


Supply Chain Contract Negotiations (Revenue Sharing or
Wholesale Pricing Contracts)
Information System
The SC Game Interface
Retailer Screen
The SC Game Interface
Distributor Screen
Contract Screen (RS Contract)
1
2
Quarterly Reports
The SC Game Debrief



Market Strategy – Pricing and market share
Supply Chain Strategy – Ordering, using fast
mode of transportation (Responsiveness vs
efficiency), coordinated ordering
The Supply Chain Contract




Wholesale pricing contract
Revenue sharing contract
Use of Information Sharing
Individual vs Supply Chain Profit
Market Strategy
Retail Price
Market Share
$300
100%
Team 1
Team 1
90%
Team 2
$250
Team 2
80%
Team 3
Team 4
$200
Team 3
70%
Team 4
60%
50%
$150
40%
30%
$100
20%
10%
$50
0%
0
1
2
3
4
Quarter
5
6
7
8
0
1
2
3
4
Quarter
5
6
7
8
Supply Chain Strategy
Order
Order
Customer
150,000
Customer
200,000
Retailer
Retailer
Wholesaler
Wholesaler
Distributor
120,000
160,000
Distributor
Manufacturer
Manufacturer
90,000
120,000
60,000
80,000
30,000
40,000
0
0
0
20
40
60
Quarter
Team 1
80
100
0
20
40
60
Quarter
Team 3
80
100
The Supply Chain Contract

Revenue-Sharing contract versus WholesalePricing contract

What is the goal and impact of the revenue
sharing contract? What is the optimal revenue
sharing contract?

What is the impact of the Asymmetric
Information?
Administrator Interface