
Beer distribution game - aniham
https://en.wikipedia.org/wiki/Beer_distribution_game
======
pinky1417
I played this game during orientation when I started my MBA at MIT Sloan (the
game was originated at Sloan). In my second year, I facilitated the game.

The most eye-opening thing for me was that a good quarter of students were
frustrated and surprised by the bullwhip effect. I'd guess the general
population would be even less understanding of a bullwhip effect. I think that
help explains why it seems so many people don't understand why it's difficult,
even for the U.S. federal government, to create more supply of hand sanitizer,
respirators, etc.

P.S. To be clear: I'm not suggesting the federal government isn't to blame for
a lack of supply - we should have had a larger strategic reserve of pandemic
mitigating supplies prior to the crisis, if only due to the risk of biological
weapons (those preparations would have been just about as useful in a non-
human-caused pandemic like COVID-19). Nor am I saying the government can't do
more right now. The Beer Distribution Game merely helps partially demonstrate
why manufacturers, suppliers, and the government (especially if they
themselves understand the bullwhip effect!) don't instantly will pandemic
supplies into existence.

~~~
Veedrac
This doesn't actually demonstrate that it's difficult, just that it's
_expensive_. If the government is willing to eat any sunk cost from
oversupply, everything becomes predictable. In the case of COVID, it's hard to
imagine any quantity of hand sanitizer and respirators doing more damage than
the harm they prevent.

~~~
Sherl
>expensive

you deal those with scenario planning, which might be the sole responsibility
of pandemic unit. We use casual loop diagrams to understand effects when math
cant be drawn out on abstract problems.

Its insanely expensive to satisfy 99% populations requirement versus 95% of
populations requirement but when that happens and if the consequence are
severe we manage those supply chains with redundancy and the costs are
absorbed with other players. Sure, it would profitable to operate without this
but my understanding is when this sh*t hits everything falls.

$15 billion savings in 2018 resulted in $12 trillion being wiped out in two
weeks.

>[https://foreignpolicy.com/2020/01/31/coronavirus-china-
trump...](https://foreignpolicy.com/2020/01/31/coronavirus-china-trump-united-
states-public-health-emergency-response/v)

>[https://markets.businessinsider.com/news/stocks/stock-
market...](https://markets.businessinsider.com/news/stocks/stock-market-
outlook-2016-trump-win-gains-erased-coronavirus-risks-2020-3-1028991585)

------
Tade0
This reminds me of a cooperative board game named Space Alert:

[https://boardgamegeek.com/boardgame/38453/space-
alert](https://boardgamegeek.com/boardgame/38453/space-alert)

Players are crew members of a 6-room ship, equipped with weapons and
generators supplying power (ammo) - all operated manually.

Each round consists of a planning and execution phase. During the former
players listen to a pre-recorded track of incoming threats and declare their
actions.

In the latter phase the threats start to arrive and the previously planned
actions are executed.

The difficulty here is that the planning phase is timed, so the team has to
communicate efficiently.

A single bad decision of a single player may doom the whole team, especially
that players can and will get in the way of each other.

I remember doing just that - instead of going to the generator, spending a
unit of fuel to charge it and distributing power to the turrets I picked the
wrong decision card which moved me back from where I started, so my pawn was
pressing the right buttons, but in the wrong room.

To make matters worse on my way back I got in the way of my teammate(and
informal captain) and prevented him from recharging the generator later, which
was important, because our turretwoman was supposed to be firing all the time.

The aliens destroyed that part of the ship killing her and leaving us
defenseless.

------
yawgmoth
LLamasoft/Opex have one, you can play it!

[https://beergame.opexanalytics.com/#/](https://beergame.opexanalytics.com/#/)
[https://opexanalytics.com/beergame/](https://opexanalytics.com/beergame/)

------
mindcrime
I first learned about this from reading Peter Senge's _The Fifth Discipline_.
If you're interested in this sort of thing, TFD is a worthy read.

[https://en.wikipedia.org/wiki/The_Fifth_Discipline](https://en.wikipedia.org/wiki/The_Fifth_Discipline)

[https://www.amazon.com/Fifth-Discipline-Practice-Learning-
Or...](https://www.amazon.com/Fifth-Discipline-Practice-Learning-
Organization/dp/0385517254)

~~~
jacques_chester
I strongly disagree. Senge's book is hand-wavy, includes acres of unactionable
fluff and -- this irks me the most -- introduces causal loop diagrams but
fails to introduce stock-and-flow diagrams.

Causal loop diagrams are basically toys, useful only during initial hypothesis
formation. You need a stock-and-flow model to actually test and elaborate your
hypothesis.

The best all-round introductory book I have read in this area is still
Sterman's _Business Dynamics_. 1st edition hardbacks are out of print, but
there are second-hand copies and also cheap international editions around. A
2nd edition is expected next year.

~~~
mindcrime
Your response reads as though you're disagree with an assertion I didn't make.
I almost feel like you read my post as saying that _The Fifth Discipline_ is
the -best- book on the topic. That I'm not saying, if for no other reason than
because I haven't read every book on the topic.

However, I stand by the assertion that it is a _worthy_ read. I gained a lot
from reading it, and if it falls short of being totally comprehensive and
standing entirely on its own... well, that's a criticism that would apply to
many books.

All of that said, thanks for mentioning the Sterman book. I wasn't familiar
with it, and I'm about to order a copy.

------
tnorthcutt
I found this web based version:
[https://beergameapp.com/](https://beergameapp.com/)

------
wyattpeak
My most interesting takeaway, from the causes of the bullwhip effect:

> Free return policies: Customers may overstate demands due to shortages, if
> customers cannot returns items, retailers will continue to exaggerate their
> needs, cancelling orders and causing in excess product or materials.

I was annoyed when I saw that stores were refusing to accept returns, thinking
that they didn't want to suffer the cost of regretful hoarders trying to make
right. Most people I talked to were pleased that hoarders were getting their
comeuppance. But its effect on supply went completely over my head, and while
I don't know if anyone else was aware, certainly nobody mentioned it.

~~~
rrrrrrrrrrrryan
I don't know if the policy was about "hoarders getting their comeuppance" so
much as disincentivizing hoarding in the first place.

------
xwdv
I’ve never understood how you win the beer distribution game, people only ever
talk about the effects on the supply chain it seems. But how do you mitigate?

~~~
hef19898
Communication, as soon as people are allowed to exchange information, results
get a lot better. Teams can start planning, based on real customer
demand,backlogs and so on. This changes everything.

~~~
kmc22
Played this game in undergrad and this was my exact experience.

------
leetrout
When I was working at UNC I tried to get us to make the beer game in VR for
the business school. You would actually see the empty shelves and then the
overstocked warehouse in VR to understand the physical constraints of the
supply chain and the issues with the bullwhip effect.

Could easily be updated to the N95 mask game. Especially given what I was
reading about melt blown production lines capacity and initial install costs.

~~~
hef19898
I adopted it once for aircraft maintenance. Still pen and paper, but the
session was hilarious! Especially as I played it with people directly and
indirectly involved with aircraft maintenance for the army. The second round
was the real eye opener, so.

------
timka
"Due to lack of information, suppliers, manufacturers, sales people and
customers often have an incomplete understanding of what the real demand of an
order is"

Of course this makes the game interesting and also explains why in real life
the only sustainable model for economy is planning. The planning starts from
actually measuring/calculating the real demand. Then you model your whole
supply chain. Of course this means the state has to have control over and
complete understanding. This is hard science
[http://www.strategplan.com/en/](http://www.strategplan.com/en/)

Also, this allows planning measures for emergency cases like epidemics, war
and other disasters.

It's impossible to achieve that with monetary approach.

~~~
alasdair_
>Of course this makes the game interesting and also explains why in real life
the only sustainable model for economy is planning.

"real life" planned economies have done terribly so far, while price-based
capitalist economies seem to have done a lot better.

>The planning starts from actually measuring/calculating the real demand.

Herein lies the problem. How do you measure "real demand" for an entire
economy, without prices? Prices convey information about what is _really_ in
demand at a given time and without them it's remarkably difficult to get
answers that don't involve guesswork or individuals demanding more than they
really need.

------
tsumnia
Here's an old Flash game that you can play to see how it works:

[https://forio.com/simulate/mbean/near-beer-
game/run/](https://forio.com/simulate/mbean/near-beer-game/run/)

~~~
somebodynew
What do you use to run embedded Flash these days? I haven't used Flash since
all of the major browsers started blocking it.

~~~
tsumnia
You are re-enable it in Chrome, that's what I've done in the past.

------
marzell
The bullwhip effect reminds me of ETL memory management issues like
backpressure and parallel streaming of pipelines to maximize throughput

------
praptak
Why is it called bullwhip effect?

~~~
Phillipharryt
A small movement at the handle of a bullwhip produces an enormous (and
oscillating) movement further down the the whip, it's an analogy for movements
in customer demand having large effects further down the supply chain.

------
steerablesafe
Even when no communication is allowed during the game, some kind of PID
control could make the supply chain stable.

~~~
oehpr
It's funny you should mention that, because most PID configurations are not
very stable. Once you introduce the Integral and the Derivative, if you're not
careful that PID will oscillate into the stratosphere.

In fact, I'd say that PID's that are functioning most efficiently are very
nearly tuned to the point of oscillating. Even worse is the kinds of
adjustments you have to make to PID's when there is significant lag between
their inputs and outputs.

~~~
rcxdude
Indeed. Control loops are generally limited by the bandwidth of the system
they are controlling, and lag in the system limits the bandwidth you can
achieve. Trying to get a PID loop to move a system faster than that system's
bandwidth will just create oscillations, and the more tightly the PID is tuned
the worse its behaviour when exposed to shocks (especially when the system
becomes significantly non-linear in the process).

You can extract more performance out of a system by having a very good
predictive model of it and measuring its inputs: This can really improve how
you drive the system but it's much more difficult to achieve, and you're still
limited by how quickly information moves through the system in terms of how
you can react.

~~~
_0ffh
Yeah, I think that's a much more promising approach. Have a good model, use it
to build an observer, now you can control based on the state of your simulated
system.

