Bull whip simulation and dynamics

EBBD Simulation seems to be successful at its goal in helping people understand how the Bull-whip effect actually impacts people who are in charge of ordering products for distribution to customers. The Bull-whip effect demonstrates that fluctuations in orders build as they head upstream in a supply chain, so that small fluctuations in demand can cause huge fluctuations in supply at the top of the chain. These fluctuations, in term, can impact availability, which has an effect on demand. Therefore, rather than supply and demand creating a linear graph, fluctuations actually cause supply and demand to create a wave shaped pattern with increasing wave height that grow in relation to fluctuations in demand.

One of the interesting things about the EBBD simulation is that it focused on the problems experienced by the end-user. It provided a simulation with four potential small-craft brewers and how a local business owner would deal with supply and demand fluctuations in order to manage inventory in that environment. For a general lesson, it was interesting, and, in a particular location, this simulation may even be valid. For example, some locations may be so associated with a particular beer that failure to carry that beer on a consistent basis may lead to a loss of business. However, because there are so many craft breweries, I think that the simulation might not give an accurate picture of how beer distribution would actually impact a small business owner. The beer is a final product and one that is replaceable. Most patrons, if informed that the selected beer is unavailable, would simply select another product. In fact, lack of regular availability may even contribute to part of a beer's popularity. For example, St. Arnold's brewery in Houston, Texas produces seasonal beers and there are lines in front of liquor stores and purchase limits for the release of certain batches of their beers. These small batches would not be impacted by the bull-whip effect in the same way as other types of beers because the brewery has made a conscious decision to limit production and not increase production in response to an increase in demand. Therefore, I am not certain that the simulation accurately predicts true supply-chain issues.

While I liked the game, it is not the best bull-whip simulation I have ever experienced. I have previously played a bull-whip game that focuses on the bull-whip effect in the root beer industry. I do not remember who published that game, but there were several students playing different roles in the game- from supplier to distributor to customer. Therefore, decision-making at each level was left to independent students who may or may not have understood the causes for fluctuations in the market or have been able to predict what people in various positions would do. I felt like this was somewhat more similar to an actual business environment. Of course, in an actual business environment, as a distributor I could contact a customer to discuss issues like substitute goods, acceptable delay times, and when to cancel orders after a backorder period. Having this information seems as if might lessen the intensity of the fluctuation magnifications as one goes up the supply chain.