Beer Game

What is the Beer Game?

The beer game is a widely used in-class game that is played in supply chain management classes to demonstrate a phenomenon known as the bullwhip effect. The game involves four players representing four stages of a beer supply chain: Retailer, Wholesaler, Distributor, and Manufacturer. Each player must decide how many cases of beer to order from its upstream partner, given the order quantity that it received in the current time period.

The players’ goal is to minimize the total cost of the supply chain, but they cannot communicate with their teammates during the game. Moreover, in the basic version of the game, the players do not have insight into the inventory levels or ordering decisions at the other players—each player only has access to local information.

Players go into the game with the goal of minimizing costs. The outcome of the game, however, is usually a demonstration of the bullwhip effect, which describes the increase in order volatility as you move upstream in the supply chain. (What is the bullwhip effect?) Instructors can use this result to discuss the importance of supply chain communication and visibility. (How do I teach the beer game?)

The beer game was developed at MIT by Jay Forrester and others in the 1960s, eventually taking its current form and getting its name in 1973. (For a thorough history, see this article.) Early versions of the game were played using paper ordering slips and plastic chips or other markers to represent units of inventory. Newer, computerized versions of the beer game streamline the gameplay, automate the scorekeeping, and allow easy visualization of the results.

The Opex Analytics Beer Game is completely free and can be used for educational, entertainment, or research purposes. The current version allows you to play on a team with three computerized players. Soon you’ll also have the option to play with three human teammates, like classic versions of the game. (This feature will be available in an upcoming release.)

The Opex Analytics Beer Game is the first and only beer game that lets you play with an artificial intelligence (AI) agent on your team. (How does the AI player work?) Or, you can let the AI play the game without you and see who earns the better score! (How do I face off head-to-head against the AI?) Our goal was to provide a fun new interface to a classic game while also demonstrating what’s possible when using AI for inventory management and many other operational problems faced in industry today. Give it a shot and let us know what you think!