TOTAL PARTICIPATORY BEER GAME
Hugh M. Seyfarth, Richard T. Farmer School of Business Administration
Miami University, Oxford, OH 45056, 513-523-2491 seyfarhm@muohio.edu
Abstract
The use of interactive activities is a cornerstone to
effective pedagogy. Probably the most famous activity in
the field of operations and supply chain management is
the Beer Distribution Game, or more simply, “The Beer
Game.” Developed in the early 1960s at MIT, the game
has been played by thousands of undergraduate, graduate
students and business professional. Over the years, the
game has evolved beyond the traditional “board-based”
version by leveraging technology. Today, many versions
of the “Beer Game” are available on the Internet and in
computer software packages. Moreover, because of the
games inherent simplicity, the rules are easily altered to
highlight specific learning objectives. The purpose of this
paper is to illustrate another alternative on how to use the
Beer Game in the undergraduate classroom setting.
Called the “Total Participatory Beer Game”, the goal is to
actively involve all 35 students as actual pieces of the
beer supply chain. By creating two independent supply
chains (each composed of 15-16 students) many of the
complexities of supply chain management can be
illustrates, explained and simplified.
Introduction
Interactive classroom activities are vital for educators to
illustrate complex concepts to students. One famous
exercise is the Beer Distribution Games, or more simply
the “Beer Game” (Sterman, 1992). Developed closed to
40 years ago at MIT, the game has been played by
undergraduates, graduate students and business executives
to experience and interact with the concepts surrounding
supply chain management. Traditionally, the game is
played on a “Monopoly-type” game board with four
players representing the four links of the simple supply
chain: factory, distributor, wholesaler, and retail.
Through the game, players are exposed to the transfer of
information from the customer (through demand at the
retail level) and how this demand filters through the
supply chain form the retailer to the factory. The
traditional “board-based” game also contains both
shipping delays and processes order delays to simulate the
lag in the supply chain and the lead-time necessary to fill
orders.
The purpose of this paper is to continue the evolution and
use of the Beer Game as a pedagogical tool to aid student
comprehension of complex business topics. The
methodology employed is a shift away from technology,
and hopes to include as many students as possible as
actual interactive members of the supply chain. It is well
proven fact that students would rather actively participate
and be involved in classroom activities. Moreover, the
version discussed in this paper hopes to simplify some of
the difficultly in the general mechanics of the game, thus
saving valuable class time to actually play the game and
discuss the issues and intricacies inherent in supply chain
management.
Literature Review
As more academics and business managers have
embraced the pedagogical use Beer Game, the
sophistication of how it is employed in the classroom
setting has expanded well beyond the traditional “boardbased” game discussed by Sterman. Instructors have
altered the rules to illustrate specific concepts—from the
bullwhip effect and fluctuations in inventory levels, to the
use of local performance measures between the nodes of
the supply chain verses more holistic global performance
measure of the supply chain (Stewart, 2001). Moreover,
with the aid of computer technology, many versions are
played electronically with the aid of the Internet (Jacobs,
2000 and Chen & Samroengraja, 2000). Jacobs explains
that while the traditional version of the game is a valuable
learning experience, it is very time consuming as a result
of explanation, actually playing the game, and the postgame activities of tabulating results, costs and building
graphs. In total, a minimum of thee hours of class time
must be allotted for the game. The Internet version of the
Beer Game performs many of the “busy work” tasks of
recording inventory levels to allow students to focus on
the actual strategy of the game, and saves much needed
class time for learning, analysis and discussion.
Some noted benefits to the electronic, Internet or
computer-based Beer Game are also discussed and
illustrated by Simchi et al. (2003). Specifically, students
are too concerned with the mechanics of the board-based
game and the order of operations to actually benefit from
the actual playing of the game, and that no real strategy
evolves by the players as they are participating in the
game. It is the contention of many Beer Game facilitators
that the electronic or computer versions are easier to
understand and allow students to focus on the desired
learning objectives. Bean (2002) discussed a further
adaptation to the Beer Game called the “Near Beer
Game”. In this simulation, even with perfect information
and communication, the supply chain still illustrates the
bullwhip effect as a result of procurement and
manufacturing delays.
In addition the contemporary business press has discussed
the importance of the Beer Game. Stewart (2001)
highlights the benefits of the use and more importantly,
the need to understand of the concepts illustrated by the
Beer Game. Real world examples of excess inventories
(e.g. Cisco’s May 2001 $2.2 billion write down of excess
inventory) and that fluctuating demand can have crippling
consequences. Stewart purports the Beer Game as an
excellent example to illustrate real-world supply chain
difficulties—that limited information between supply
chain participates can lead to serious cost escalations and
can ultimately lead to job cuts in an effort to trim runaway
costs. Moreover, concepts illustrated by the Beer Game
(bullwhip effect) are also receiving attention in the
business press, again, because of the cost implications and
the result of poor demand forecasting and long production
led times (“Chain Reaction”, 2002).
Total Participatory Beer Game
The genesis of this version of the Beer Game was the
result of a lack of raw material. I only had one “boardbased” version of the game, but I wanted my entire class
to participate (average class size in the survey Operations
Management course is 33-35 students). Since I was
“long” in students and “short” on board space I decided to
use the students as the actual parts and participants in the
supply chain. Using Sterman’s diagram I place students
in the roles of retailer, wholesaler, distributor and the
factory. I also have eight students take the rolls of both
the shipping and order delays.
In a class of 33-35 students I assemble two teams to
represent two independent beer supply chains. Classroom
layout must allow for some degree of flexibility.
Individual desks are easy to rearrange, and classrooms
that employee the case-study layout separated by a central
aisle are easy to organize into two independent supply
chains. Each team is composed of 14-16 students.
Pennies, nickels and dimes are used to simulate cases of
beer, while small pieces of papers are used as order forms.
Two-student teams are assigned to each of the four nodes
of the supply chain. This is done to allow students to
actively inventory and order cases of beer, and also
maintain inventory holding and backorder costs ($.50
holding cost per case and $1.00 backorder cost per case).
An individual student monitors each “delay” along the
supply chain, with each student controlling the “shipping
delay” and either “order placed” or “incoming order”
place depending on where they sit in the supply chain.
These students represent the flow of information back into
the supply change and the movement of goods forward to
the customer.
Following the standard Beer Game rules, with the supply
chain in equilibrium, we begin playing the game. The
equilibrium state of the supply chain is 15 cases of
inventory at each of the four nodes along the supply
chain. Each order delay contains demand for five cases of
beers, and each shipment delay mirrors demand with five
cases of beer. I introduce the game the day before we
actually play and provide the game rules and a diagram of
the supply chain. The diagram below is a simplified
version and includes the rules provided to students:
Shipments of Beer (Goods)
Retail...Wholesale...Distributor...Factory
Demand for Beer (Information)



A two-person team will operate each node along
the supply chain. You will be responsible for
inventorying and ordering cases of beer.
A single student will be used to represent and
operate both shipping delay and order delay.
These delays represent lag time of one week in
the supply chain. There is a two-week delay
between the nodes of the supply chain. Ex: There
will be two students between “Retailer” and
“Wholesaler”.
Beer orders are passed face down, with only the
retailer knowing actual customer demand. No
communication is allowed between the nodes of
the supply chain.
Once the supply chains teams are organized and the rules
are explained I normally have four or five students that
are not included in either supply chain. I label these
students “supply chain consultants” and employ them as
beer customers and supply chain facilitators. These
students are invaluable as they help confused students by
maintaining a holistic view of the supply chain. The
students also facilitate the game “set-up”, thus saving
valuable class time. The consultants are also very
valuable during the post-game review, and I will highlight
this in the “Discussion” section of this paper.
The simulation begins with a practice round that is played
“open”. Orders are placed at each retailer and the general
mechanics of the game are experienced for the first time.
The retailers fill the order, receive the next shipment of
beer and place an order for more beer (again, stressing
demand). This process transcends the supply chain, and
is carried out by the wholesaler, distributor, and the
factory. It is important that the students who represent
shipping and order delays pass the physical cases of beer
(pennies) toward the retailer and the orders for beer
(demand information) back toward the factory.
The last part of the discussion involves how to fix or
correct the supply chain to avoid the problems
highlighted above. It is during this discussion that
the “consultants” can add valuable insight as they
viewed the supply chain globally, and not locally as
those who participated. Some typical solutions:

After the practice round we follow the same standard
format with demand at five cases of beers to be sure both
supply chains are comfortable with the ordering and
shipping process. At the fifth week customer beer demand
is doubled to ten cases, with only the retailer aware of this
change in demand. Again, it is stressed that information
sharing is not permitted between students along the
supply chain. On average we play 15-25 weeks of the
game. At the conclusion of the game each supply chain
node computes their inventory/backorder totals, and these
results are summarized and juxtaposed against one
another.



Better communication between all nodes of
the supply chain.
Turn the orders face up and allow those
students to communicate information back
into the supply chain.
Introduce Internet real-time ordering and
point of sale information to provide the
factory better demand information.
Eliminate non-value adding activities along
the supply chain—in a sense remove
redundant students, and seek to decrease
shipping times.
Discussion
Conclusion
One of the interesting differences of the Total
Participatory Beer Game verse other versions is the ability
to discuss problems that occur along the supply chain in
real time. Again, at the end of the game we “turn over”
the facedown orders and reveal the size of the orders.
Student are surprised to learn that while demand only
doubled from five to ten cases of beer, the actual orders
are often four to five times greater than original demand.
This is an excellent illustration of the bullwhip effect. We
then trace the demand orders back to the factory and it is
quickly determined that the factory’s current capacity
would have been unable to meet demand.
The Beer Game has illustrated the principles of supply
chain management for over 40 years. The strength of this
pedagogical tool is its inherent simplicity and flexibility,
coupled with the creativity of those practitioners that
continually adapted the game. Whether the game is
played on a game-board, over the Internet or in a total
participatory classroom environment the goal must
continue to force interactive student participation in the
complexities of supply chain management.
When I stop the game we discuss how each node of the
supply chain felt during the game. I also ask how the
“order delay” students felt while playing the game. The
answers compose the post-game discussion. Typical
responses:
 Beer demand increased too fast without any
warning.
 Once backorder occurred, frustration levels grew
greater and greater every “week”.
 The factory had no idea of the orders that were
ultimately going to reach them.
 The four nodes of the supply chain had little
concern for the inventory levels of the other
members of the supply chain.
 “Order delay” students felt they have no impact
on the supply chain. Non-value added
participants, and once the simple task of passing
beer forward and orders back the game was
“boring”.
References
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5.
6.
7.
Bean, M. “Bullwhips and Beer: Why Supply
Chain Management is so Difficult.” Forio
Business Simulations, April 20, 2002.
“Chain Reaction.” The Economist. January 31,
2002.
Chen, F., and Samroengraja, R “The Stationary
Beer Game.” Production and Operations
Management Society, Vol. 9 No. 1, Spring 2000.
Jacobs, F. “Playing the Beer Distribution Game
over the Internet.” Production and Operations
Management Society, Vol. 9 No. 1, Spring 2000.
Simchi-Levi, D., Kaminsjy, P., and Simchi-Levi,
E. “Appendix A: Computerized Beer Game.”
Designing & Managing the Supply Chain, 2nd
Ed. Burr Ridge, IL: McGraw Hill, 2003.
Stewart, T. A. “Barely Managing: Beer Today,
Gone Tomorrow.” Business 2.0, August 2001.
Sterman, J. ‘The Beer Game.” OR/MS Today,
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