Faculty & Research

Beer Game: Serious Business John Sterman

A key tool for teaching the system dynamics of supply chains and the core principles of effective management, The Beer Game puts teams of students in charge of managing the four areas of a distribution chain. The players at each level — retailer, wholesaler, distributor, and factory — receive shipments of beer, fill as much of their customers’ orders as possible, and place new orders for beer with suppliers. As in real business, the goal is to keep company costs low while meeting customer demand.

The Beer Game does not produce winners or losers. Students make operational decisions and receive feedback from past decisions. Often, they're surprised by the side effects and delayed consequences of their actions, but realize how much better it is to be surprised at the keyboard than in the boardroom. By game's end, management students have gained insight into the behavior of a distribution system — and the difficulties of developing a robust strategy for managing even a simple operation.