The MIT Beer Game has been humbling planners since the 1960s. Four companies pass orders up a beer supply chain and cases back down. Consumer demand barely moves, yet orders upstream swing wildly. Pick a role and see if you can beat a typical team.
Every case in stock costs $0.50 a week. Every case on backorder costs $1.00 a week. Running out is worse than holding.
Orders take 2 weeks to reach your supplier. Shipments take 2 more weeks to reach you. The factory takes 4 weeks to brew.
You only see your own stock and the orders arriving from your customer. The other three tiers play like a typical human team.
This order arrives in about 4 weeks. Press Enter to place it.
| Week | Order in | Received | Inventory | Backorder | On order | You ordered |
|---|---|---|---|---|---|---|
| Your first order will show here. | ||||||
Orders placed by each tier, week by week, against what consumers actually bought.
Stock on hand minus backorders. Below zero means customers are waiting.
Most players react to the backorder in front of them and ignore the cases already on the way. When those cases land, the warehouse floods. Sterman's 1989 study found this in almost every team.
Four weeks between order and arrival means every correction is late. Late corrections get bigger, and each tier amplifies the one below it.
The factory only sees the distributor's orders, which are already distorted twice. Sharing point-of-sale data is the single biggest fix.
A team that simply orders what it receives runs this game for a fraction of the cost. Boring, disciplined planning beats heroic firefighting.