Modeling Perishability in MIT Beer Game Business Simulator

Abstract

COVID-19 pandemic showed that customers tend to create an excessive inventory, and these demand shocks caused by disruptions or disruption anticipation destabilize the supply chains. The consequences of such demand shocks are hard to predict and model. We present a modified version of the MIT Beer Game which includes product perishability constraints. The model is implemented in Python 3 and uses a client-server architecture and the internet or a local server for players’ interaction. The increased complexity of the game dynamics affects the players’ behavior. The work is aimed at identifying the specifics of supply chain actors’ decisions under constraints of the limited shelf life of a product. The main hypothesis is as follows: when the number of uncertainty factors in the supply chain operation increases, the ability of the supply chain links (players) to implement an effective algorithm for an order and shipment planning decreases. Additional operational measures can help to allocate risks in a more equal way within the supply chain.