[HN Gopher] The Beer Game (1992)
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The Beer Game (1992)
Author : dunefox
Score : 52 points
Date : 2022-05-08 10:44 UTC (1 days ago)
(HTM) web link (web.mit.edu)
(TXT) w3m dump (web.mit.edu)
| calebbushner wrote:
| So, so glad to see this shared here. I've had many friends ask if
| they should get an MBA and I almost always say no, and give them
| a reading/activities list instead, which ALWAYS includes the Beer
| Game. For better or worse it was one of the most illuminating
| parts of b-school and it's still woefully under-studied and
| under-practiced today. ESPECIALLY today, with all of the supply
| bullwhipping going on.
| Nakili wrote:
| Would you kindly share said list ?
| supercanuck wrote:
| Played this as a Boeing intern. It was wild and so much fun.
| lifeisstillgood wrote:
| I am sure there exists a beer game that is designed for software
| "production" not beer.
|
| if not I am pretty sure it can be built - and I think it would be
| instructive
|
| - delays in getting code out to production mean the fix that
| allows for beer to be sent to different pubs once a day is not
| available ?
|
| - Lack of specifications means ...
| dang wrote:
| Related:
|
| _The Beer Game -or- Why Apple Can't Build iPads in the US_ -
| https://news.ycombinator.com/item?id=3802515 - April 2012 (246
| comments)
| vonnik wrote:
| A couple years ago Llamasoft/Coupa released a beer game optimized
| with reinforcement learning.
|
| https://beergame.opexanalytics.com/#/
|
| I don't know where they took it, but my startup at the time saw
| huge gains in performance applying deep RL to industrial ops and
| supply chain problems like that. Shifted the whole Pareto
| frontier.
| gwern wrote:
| Any writeups on either?
| vonnik wrote:
| DM'd you on Twitter.
| dragontamer wrote:
| Does this game exist in a easily accessible board-game format? If
| not, is there some PDF or something that can help a "board game
| enthusiast" like myself set it up and play it?
|
| I see that this article discusses a "deck of cards", as well as
| various records that must be managed, and a "Stack of pennies"
| representing something. So there's some game that really exists
| out there.
| pjot wrote:
| Something similar can be found in the book "The Goal" but with
| a six sided die and matchsticks. The premise is explained here:
| https://math.stackexchange.com/questions/2149283/math-behind...
| dgabriel wrote:
| Forio has a digital version
| https://forio.com/app/showcase/near-beer-game/
|
| I was on a team that wrote a beer game app for HBS, and the
| rules are really simple. It's not really worth playing more
| than once, though.
| pessimizer wrote:
| As a game with a punchline, it's 1) not worth playing twice and
| 2) the owner/proctor of the game already knows the punchline.
|
| There's probably some good way to make a bullwhip effect game,
| maybe with each player playing all stages, but each stage in a
| different supply chain (and maybe with the retail availability
| of the product of one supply chain generating the demand on
| another.)
|
| For games in the same ballpark, Schoko & Co., Container, and
| Energie Poker are good ones.
| pclmulqdq wrote:
| There is a board game, in the form of a roll-out playmat and
| some decks of cards. I don't know if you need to email John
| Sterman to get it, but it does exist. You also need poker chips
| or a lot of pennies to represent inventories, and a pen and
| paper to log how you do.
|
| This is a co-op game made for business school classes, and you
| won't be able to get the full experience of it unless you
| enforce the "no talking" rule between each player, and have
| some other people to compare against.
| interroboink wrote:
| I like this idea, but what is the ultimate lesson, other than
| "chaos ensues, and it's nobody's fault in particular" ?
|
| I mean, it doesn't seem to provide any guidance on how to
| actually solve these problems, only make you aware that they
| exist. Usually a "flight simulator" experience would address that
| side of things, too.
|
| I suppose a worthwhile takeaway is "don't be so quick to blame
| others," which is good for keeping humility, but that doesn't
| address the mechanics side of things.
| hef19898 wrote:
| Well, the lesson is that communication and collaboration are
| the key to mitigate the bullwhip effect. That, and preventing
| local optimisation.
| Jtsummers wrote:
| Systems have properties beyond individual actor choices or
| actions. If it causes harm (bullwhip effect here), identify the
| systemic factors at play, and try to change the system.
|
| Here, lack of communication was one of the primary causes of
| the chaotic effect. So improve communication across the supply
| chain. Slow feedback loops and limited communication are likely
| to produce this bullwhip effect regardless of the intelligence
| or discipline of any of the individual actors (retailers,
| wholesalers, factory). They have no way to know, at the
| factory, that the surge is only temporary.
|
| More broadly, examine whatever systems are at play in your work
| and industry. Are they producing positive or negative results?
| If positive, try to reinforce them, if negative try to alter
| them.
| Sebb767 wrote:
| I guess it's mostly just about putting people in a stressful
| management situation to get them used to it. Not much of an
| ultimate lesson there, just some experience so they can keep
| calm once they encounter it in the real world.
| Jtsummers wrote:
| The Beer Game is a simulation of something that takes place
| over weeks and months and years in the real-world (you don't
| normally double or triple your manufacturing capacity in
| hours, unless you went from one employee to two). It's not
| about experiencing a "stressful management situation." It's
| not the same as pilots in flight simulators experiencing a
| simulated real-time disaster in the making and having to
| respond correctly (or at least more correctly) in real-time.
|
| The objective of The Beer Game and the other materials
| related to it and the research by Forrester et al. is to
| develop an understanding of systems dynamics and systems
| thinking. In this _specific_ game the systems effect they are
| exploring is the bullwhip effect and how imperfect,
| incomplete information can cause it. Other games in this
| genre of games may have specific other systems effects they
| aim to explore, but in total their objective is to get the
| participants to start thinking about _systems_. Not to help
| them avoid panicking (though thinking clearly does help with
| that).
| pclmulqdq wrote:
| I love the beer game as a management simulation. You get to see
| how difficult communication and future uncertainties can create
| positive feedback loops in supply chains. Those positive feedback
| loops cause the supply chain to break completely, and, in most
| cases, never recover.
|
| My mother and I actually "solved" the beer game a while ago based
| on the simplifying assumptions that the beer game makes. It turns
| out that the actors other than the factory actually have no power
| over inventory in the system, and since inventory costs the same
| everywhere, you should be holding 100% of inventory in the
| retailer and just passing inventory along the supply chain. The
| factory is the only player that should be making decisions about
| how much to produce (everyone else should just order what is
| coming along the line).
|
| That reduces a complicated system into a fairly simple control
| system with a long delay, which would be hard to solve except
| that the beer game is based on having almost no dynamics! The
| relative lack of dynamics lets you easily create a stable control
| algorithm at the factory to keep system-level inventory and
| backlog at 0.
|
| That said, the facilitators of the game will often taunt you to
| try to create dynamics, and you are not supposed to communicate
| with other members of your team (except when setting initial
| strategy and meeting each other) so chaos generally ensues.
| dragontamer wrote:
| > It turns out that the actors other than the factory actually
| have no power over inventory in the system, and since inventory
| costs the same everywhere, you should be holding 100% of
| inventory in the retailer and just passing inventory along the
| supply chain
|
| I was expecting this result despite never actually playing this
| game and only knowing things from the article alone.
|
| If this game is what business-managers are playing to learn
| dynamic systems... then it is almost certainly the source of
| "just in time" inventory management of today's supply chains,
| then something like that is natural.
|
| So the question is: is the model wrong, or is just-in-time
| inventory management (for middle groups, like distributors and
| wholesalers) really the best way to manage inventory?
| hef19898 wrote:
| The beer game is a quick, easy and fast way to show the
| behaviour of supply chains, and the dreaded bullwhip effect.
| It is not meant to simulate whole supply chains or teach
| inventory strategies.
|
| The answer to your question is, no the beer game isn't wrong,
| and it depends. Because there is no "best" way for anything
| in supply chain management.
| whatshisface wrote:
| The beer game was purposely designed to isolate human
| mistakes as a cause of instability, separated from weather
| and stuff like that. What weather, technological changes,
| etc. do is it makes it impossible to design a simple control
| system.
| pclmulqdq wrote:
| I think there are two simplifying assumptions that are
| problems:
|
| 1. The cost to hold inventory is equal at all parts of the
| supply chain - this is demonstrably not true for most supply
| chains (in fact, it's usually cheapest to hold supply
| somewhere in the middle of the chain), but retailers like
| Amazon and Walmart have figured out how to make this almost
| true. That allows them to operate with less slack.
|
| 2. There are almost no demand dynamics. This seems to usually
| be a good first-order approximation, but we saw during the
| pandemic that there were some demand shifts that the system
| was unprepared for. You can handle dynamics in demand if you
| build slack into the system (in the case of the beer game,
| this means controlling inventory to some positive number).
|
| I think we were caught in a situation where 1 and 2 were both
| considered to be true, and we just violently exited that
| regime. It will be back - we will forget the demand shock and
| JIT will return since it has the lowest unit costs - but for
| now we are facing the full brunt of the bullwhip event while
| we build up stockpiles.
| tsumnia wrote:
| If you're feeling extra froggy, here's an implementation of the
| game [1]
|
| [1] https://forio.com/app/showcase/near-beer-game/
| pintxo wrote:
| Played this at university, can confirm it ends in utter chaos.
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