Ventana software support forum

Posted by ""Ilker Soydan"" <ilkersoydan@hotmail.com> Hello all,

I would like to know the criteria that might be used to select among 2 competing Distributors or Wholesalers in a Beer Game setting. As you might know, the usual costs related with Beer Game are:

1. Inventory holding cost
2. Backlog cost

If I have 1 Point-of-Sale and 2 wholesalers, how should the point-of-sale decide from which wholesaler to purchase beer? What should I introduce as a selection criteria? Ex: Price?

The same problem exists for the factory to ship to the wholesalers or distributors. How should the factory ship its 100 beer (supply), if the total demand coming from Dist.1 and Dist.2 is 120? Which one should get more? or should they get equal amounts?

What could be the implications of these selections?

Thanks in advance...

*_/Ing. Ilker SOYDAN/ _*

*Politecnico di Milano*, /Phd Candidate /

Management, Economics and Industrial Engineering
Via Giuseppe Colombo 40, 20133, Milano Posted by ""Ilker Soydan"" <ilkersoydan@hotmail.com> posting date Thu, 25 May 2006 15:48:54 +0200

Posted by Jim Duggan <JAMES.DUGGAN@NUIGALWAY.IE> Hi... you could consider the average processing time of the wholesalers, which could be calculate as Backlog/Fulfilment Rate, and so the wholesaler with the lowest time could be selected.

Also think of what metrics companies use to select a vendor (you could enhance your model with some of these):
These could include: reputation; past performance; delivery time; quality; expected performance; and cost (to name a few).

regards,
Jim.
Posted by Jim Duggan <JAMES.DUGGAN@NUIGALWAY.IE> posting date Thu, 25 May 2006 19:40:31 +0100

Posted by ""Jim Thompson"" <james.thompson@strath.ac.uk> Ilker asks: ""I would like to know the criteria that might be used to select among 2 competing Distributors or Wholesalers in a Beer
Game setting."" He goes on to ask, ""If I have 1 Point-of-Sale and
2 wholesalers, how should the point-of-sale decide from which wholesaler to purchase beer? What should I introduce as a selection criteria?""

According to the Society Web site, ""The Beer Game was developed to introduce students, managers and executives to concepts of system dynamics. The purpose of the game is to illustrate the key principle t hat 'structure produces behavior'.""

What principle are you demonstrating with the game?

It would be fun and a challenge to design a game to demonstrate principles of price dynamics. I am not sure that one should start with the Beer Game, however. If the purpose is to demonstrate market pricing principles, you might auction beer and have a change in supply or demand to see how students respond to the different conditions. Or there could be two auction sites, one that is free to enter and one that costs $X, and see how sunk costs affect decision-making or see if students think to cooperate (Nash equilibrium), etc.

This should be an interesting thread. Great topic.
Jim Thompson
Posted by ""Jim Thompson"" <james.thompson@strath.ac.uk> posting date Fri, 26 May 2006 00:00:36 -0400

Posted by ""Natarajan R C"" <cnutraj@mail.tapmi.org> Hello !

Regarding your query about the method of allocating to different competing channel-members (of the same level)I think neither method is superior to the other since whichever method of allocation you choose, it will invariably result in Shortage-time-gaming.

Nat
Posted by ""Natarajan R C"" <cnutraj@mail.tapmi.org> posting date Thu, 25 May 2006 21:34:10 +0530