Beergame And Bullwhip

Question 1

Impact of bullwhip effect (7)

Answer 1

• higher manufacturing costs
• higher inventory costs
• longer lead times
• higher transportation costs
• higher shipping and receiving costs
• lower level of product availability
• decreased profitability

Question 2

Obstacles to coordinate SC: incentives

Answer 2

• local optimization
• sales force incentives (hockey stick effect: suddenly high sales at end)

Question 3

Obstacles to coordinate SC: information processing

Answer 3

• forecasting not based on demand
• lack of information sharing

Question 4

Obstacles to coordinate SC: operational

Answer 4

• batching: large lots
• rationing and shortage gaming

Question 5

Obstacles to coordinate SC: pricing (promotions)

Answer 5

• lot size discounts
• price fluctuations

Question 6

Obstacles to coordinate SC: behavioral

Answer 6

• „my turf“
• blaming others
• No learnings
• lack of trust

Question 7

Definition bullwhip effect

Answer 7

small changes in the retailers demand become amplified when moving up the supply chain from the retail end to the manufacturing end