Manual for the Beer Game

TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................ 2 1. INTRODUCTION................................................................................................................ 3 2. STARTING THE GAME.................................................................................................... 4 2.1. DOWNLOADING AND INSTALLING THE GAME ................................................................. 4 2.2. LOADING THE CPN MODEL ............................................................................................. 4 2.3. THE USER INTERFACE ...................................................................................................... 7 2.3.1. Current Status ......................................................................................................... 8 2.3.2. Line Chart ............................................................................................................... 8 2.3.3. Place Order ............................................................................................................. 8 2.3.4. Costs until time period ............................................................................................ 8 3. PLAYING THE GAME ...................................................................................................... 9 3.1. FIXED PARAMETERS ........................................................................................................ 9 3.2. PLAYING A SCENARIO ..................................................................................................... 9 3.3. CUSTOMIZING THE GAME .............................................................................................. 11

1. Introduction
The Beer Game is a role-playing simulation developed at MIT in the 1960s to clarify the advantages of taking an integrated approach to the managing of a supply chain. Consider a simplified beer supply chain. This supply chain consists of a retailer, a wholesaler which supplies the retailer, a distributor which supplies the wholesaler and a factory with unlimited capacity and raw material which brews the beer and supplies the distributor. Each component in the supply chain has unlimited storage capacity and there is a fixed supply lead time and order delay time between each component. Each week, every component in the supply chain tries to meet the demand of the downstream component. Any orders which cannot be met or fulfilled are recorded as backorders, and are met as soon as possible. No orders will be ignored and all orders must eventually be met. At each period every component in the supply chain is charged a shortage cost of 2 per backordered item. Also, every period each location is charged inventory holding cost 1 per inventory item it owns. Each component in the supply chain owns the inventory at that facility. Assume that the items that are in transit between components have cost zero. Each supply chain member orders some amount from its upstream supplier. It takes one week for this order to arrive at the supplier. Once the order arrives, the supplier attempts to fill it with available inventory, and there is an additional two week transportation delay before the material being shipped by the supplier arrives at the customer who placed the order. The goal of the retailer, wholesaler, distributor and factory is to minimize cost. They can choose to do this individually or for the entire supply chain.

2. Starting the game

In the next paragraphs you can find how to run and play the game. We start with the installing of the game. Next we show how to open the CPN model in CPN Tools, and explain the user interface of the game. The last paragraph will explain the game play in more detail. To be able to run the game, you need to have installed at least CPN Tools version 1.1.8. However CPN Tools 1.2.0 is recommended, since it is the most stable version. You will also need to have at least Java run environment 1.4.1 installed.

2.1. Downloading and installing the game

To install the game, download the beergameall.zip file. Next unzip this file to a folder on your hard drive. The beergame.cpn file is the CPN model of the Beer Game, the beergame.jar file is the Java application that belongs to the Beer Game CPN model.

2.2. Loading the CPN model

Loading the CPN model is the same for all of the four games. To load the CPN model for the game, right click and hold the right mouse button in the workspace. The marking menu as depicted in figure 1 will appear.

Figure 1

Next move the move cursor to Load Net. Now release the right mouse button. A dialog window will appear where you can choose a CPN model to load. Here we choose the CPN model of the Beer Game. Go to the location of the CPN model and choose to open the beergame.cpn file.

Figure 2

Now that the CPN model has been loaded, the settings for the simulation toolbox have to be changed. To do so, click on the triangle next to Tool box, then on the triangle next to Simulation, and finally on the triangle next to Play. The menu should look like the one depicted in figure 3. Now change the number of steps of the simulation to a large number, for instance 100000. The delay in milliseconds has to be set to 1.

Figure 3

Next left click and hold on Simulation, move the mouse pointer into the work space and then release it. The simulation toolbox appears. Note that the value beneath the play button should be equal to the large number, 100000. The simulation toolbox is depicted in figure 4.

Figure 4

To start the simulation, in this the game, left click on the play button. The mouse pointer now has the play button next to it. Now move the mouse over to the model area as depicted in figure 5.

Figure 5

Left click the mouse, and the simulation will start.

!!! IMPORTANT !!!

Before you start the Java application of the game, make sure that the simulation of the game is started. If this is not the case, then the Java application is not able to connect to CPN Tools. The application will notify you of this by displaying a message Could not connect to CPN Tools. You will have to quit the application and try again.

2.3. The user interface

In the Beer Game Java application you first have to specify the port of CPN Tools to which it has to connect. By default this is 9000, so you do not have to change anything in the window as depicted in figure 6.

Figure 6

Before you press the connect button, make sure you have started the simulation in CPN Tools. If the simulation was started, a window as depicted in figure 7 will appear.

Figure 7

2.3.1. Current Status

In the current status part you can see the status of the component you are playing. In this case it is the status of the retailer. Time period is the current period; it is the current time value of the simulation of the CPN model. Current demand is the demand you are facing for the current period. Forecast is the demand forecast for the next period. It is based on a moving average of three periods. The on hand stock is the number of beer cases that the retailer has available. Still to ship is the customer demand that is not yet fulfilled, whereas still to receive are the cases of beer you still have to receive from the wholesaler.

2.3.2. Line Chart

The line chart displays the demand and the forecast per time period. The order size line is the history of orders you have placed.

2.3.3. Place Order

Here you can place order with the retailer. To do so enter a value for your order in the text field. Make sure you enter an order quantity of 0 or greater. The clear button clears the text field, whereas the order button places the order at wholesaler.

2.3.4. Costs until time period

Here the holding and backorder costs until the current time period are displayed. Unfortunately it is not possible to display the costs of the entire supply chain. These have to be read from the CPN model in CPN Tools

3. Playing the game

In order to play the game, load the Beer Game CPN model in CPN Tools. This is described in section 2.2. When you have loaded the model, start the simulation. Now load the Beer Game Java application and press the connect button. After you have pressed the connect button the following window should appear:

Figure 8

Refer to section 2.2. if the connection between the Java application and CPN Tools cannot be established. Before we explain how to play the game, we first explain the fixed parameters of this game.

3.1. Fixed parameters

Parameter Backorder cost Holding cost Order lead time Supply lead time Value 2 1 1 2
Table 1

In table 1 the fixed parameters of the Beer Game are listed. In making a decision about the order size, you have to take into account these values.

3.2. Playing a scenario

If the simulation was started correctly in CPN Tools, a window as in figure 7 will appear. In the status bar the message connection established is displayed, indicating that the application has a connection with CPN Tools. If the application is not able to connect it will display this as well. This can happen when for you instance the simulation was not started in CPN Tools. Assuming that the application was able to connect, you can now start playing the game.

The game is played for 23 periods. The goal is to meet customer demand, while minimizing costs. Since the on hand inventory and the backorders have costs, you have to think about how much to order every period. The status for a game after 14 periods is depicted in figure 9.

Figure 9

Figure 10

The game ends after 23 periods, this is depicted in figure 10. The status bar also indicates that the game has ended. To view the costs of the other players in the supply chain you will have to look in the CPN model.

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3.3. Customizing the game

Some parameters of the game can be changed to be able to try different scenarios. This is possible because the Java application displays the state of the CPN model. There is no strict connection between the Java application and the CPN model. The order and supply lead times can be changed. However these changes require more indept knowledge of modeling with Petri Nets.

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