For the Root Beer Game Simulation, I played the role of a factory. My responsibility was to receive orders from the distributor and place orders for raw materials. At the beginning, the orders I received from the distributor was pretty stable (50,000 products each week, for the first 5 weeks). I could have used the 150,000 products that I was already carrying, but I decided not to. Instead, I ordered more inventory to plan ahead for increased demand. I did this despite the inventory costs because I knew that customer demand can change erratically. I also knew that this game was a simulation of the Bullwhip Effect. From previous readings and lectures, I knew that when a Bullwhip Effect happens, the demand variation is much more drastic in upstream …show more content…
Simply put, the demand variation was much worse than I had imagined. I tried to carry more than enough inventory, despite the inventory costs, but I still could not keep up with the volatile order requests from the distributor. One week, they ordered nothing, and then the next, they request an extremely large order that ends up exceeding my inventory. The lesson I learned from this challenge was that sometimes, it’s impossible to prevent stockouts from happening. You just have to come to terms with the backlogs. When I put myself in the position of a factory manager, although I have to pay more money for backlogs, I would much rather prefer to have too much demand than none. If I were managing this supply chain I would propose a hybrid, push and pull, strategy that goes beyond a single company. While completing the simulation I was not allowed to communicate with the other companies and strategize. But if given the opportunity, I would propose that the downstream companies use a pull strategy and the upstream companies use a push strategy. This way, downstream companies will always have inventory that they can pull based on actual (consumed) demand and upstream companies can focus on pushing the inventory based on forecast demand. The current strategy does not work very well because each company in the supply chain is independently pushing and pulling inventory based solely on their own assumptions about the demand. That is why I always had either way too much or way too little inventory; never just