A thorough Analyses of the beer game data Interpretation of the beer game Analys

Question

A thorough Analyses of the beer game data Interpretation of the beer game Analyse the provided beer game data using Excel.

In doing so, you might follow these steps:

a. Plot the cumulative costs (x-axis: weeks, y-axis: cost, all four roles in one graph)

Discuss the data:

1. What do you think contributes to this effect?

2. What are the implications for the retailer and the factory

Excel file link: https://ufile.io/kiyxo Alternative link: https://files.fm/u/cc2yxn7u Alternative Link: http://www.filedropper.com/beergamedata_2

Let me know what the issue is? Can you not download the file or can you not open the file?

| 5055505550550500000000555055550000000000 50000550055050500 0 0000005555005005 0 0 0 0 0 0 str er 0 0 0 0 0 0 0 0 5 0 5 5 5 5 5 5 60 5 5 5 5 5 5 5 5 5 4 8 8 8 8 8 8 8 8 8 9 883 55500 10 5 5 5 5 0 0 5 5 0 5 0 5 0 0 0 0 0 0 0 0 0 5 5 5 5 0 0 5 0 0 1 0 0 0 er 0 0 0 0 0 0 0 3 1 9 1 6 5 4 3 2 1 5 4 5 6 7 7 4 3 2 2 3 9 8 7 6 5 9 3 2 3 39 555599962 10 7 4 0 0 5 5 0 0 5 5 0 5 0 5 0 0 0 0 0 0 0 0 0 555513 er d 5 5 5 5 5 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9

Explanation / Answer

The effect that is shown here in BEER Game simulation is called BullWhip Effect.

Causes

due to unstable customer demand businesses try to forecast demand to properly position inventory and other resources. Also at various nodes in supply chain there is a safety stock kept.

As we move up the supply chain each supply chain participant has greater observed variation in demand and thus greater need for safety stock. The effect is that variations are amplified as one moves upstream in the supply chain

Part B) If you look at customer demand it is fairly consistent with a range of 5-9 units. but if you look at factory order it is varuing from 0-70 and from retailer 0-30. This shows that retailer is not able to correctly forecast the demand and is anticipating much higher fluctuation. On the other hand the factory has to respond to market forces from wholesaler and distributor and hence even they are piling up the inventory.

The huge amount of order buildup is essentially showing that a suboptimal use of resources is being done and hence probably a better demand forecast training from retailer level is required.

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