Beergame

Developments in Business Simulation and Experiential Learning, Volume 25, 1998
ADMINISTERING THE MIT BEER GAME: LESSONS LEARNED George C. Jackson, Wayne State University John C. Taylor, Wayne State University ABSTRACT The popularity of Peter Senge’s book The Fifth Discipline: The Art and Practice of the Learning Organization has led to a great deal of interest in the Beer Game or BeerDistribution Game which he describes in chapter 3. The Beer Game simulates a distribution channel with four members who must satisfy consumer demand. The Beer Game has been proven to be an effective experiential exercise for teaching participants about marketing and logistics channels in particular and about systems in general. This paper provides guidelines and insights about administering the Beer Gamebased on the authors experience employing it to teach both undergraduate students and business executives. INTRODUCTION The popularity of Peter Senge’s book The Fifth Discipline: The Art and Practice of the Learning Organization, has sparked an interest in the Beer Game, also known as the Beer Distribution Game, which is described by Senge in chapter 3 (Senge, 1990). The Beer Game was developed atthe Massachusetts Institute of Technology in the 1960’s. In the Beer Game teams functioning independently as brewers, distributors, wholesalers and retailers attempt to satisfy consumer demand as determined by the game’s administrator. Participants in the game learn several important lessons about operating in systems composed of independent entities with very limited communications between them.The ‘Beer Game’ has proven to be a very simple yet effective experiential exercise for teaching the dynamics of marketing and logistics channels specifically and systems in general. As such it is of considerable interest to teachers of business. The purpose of this paper is to share what we have learned about administering the ‘Beer Game’ to undergraduate students and business executives. Whilethere are several very good descriptions of how to run the Beer Game, there are a number of lessons we have learned on our own since we began using the Beer Game in class and elsewhere. This paper is meant to be supplementary to the other sources of information about the game. We will first describe the game and how it is played. Secondly, we will describe the materials that are available and that wehave used and developed to play the game. Thirdly, we will discuss what we have learned about administering the game and some differences we have noticed between how undergraduates and business executives play the game. Description of Game The following is a relatively brief description of how the Beer Game is played. It is meant to give the reader a basic understanding of the mechanics of thegame. There are several good descriptions of the game available. One is found in Senge’s book which describes in detail the lessons taught by the beer game. A set of instructions for playing and administering the Beer Game is available for twenty dollars from the Systems Dynamics Group at MIT. Also, an article by Goodwin and Franklin (1994) describes how the game is played and suggests additionalexercises that can be effectively added to it. All three of these are must reading for someone planning to use the Beer Game in the classroom or seminar. The game simulates a marketing channel with four members: retailer, distributor, wholesaler and brewer. A schematic of the game is presented in Figure 1. The time period for the game is one week intervals. Each week customers buy beer from aretailer’s inventory. The quantity of consumer demand is determined by the administrator. Each member of the channel, each week, receives a shipment from

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Developments in Business Simulation and Experiential Learning, Volume 25, 1998
their supplier and each member places an order with their supplier. The brewery places a production order or plan. Also each week, each member of the channel...