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Decision making in the beer game and supply chain performance

Content Provider	Springer Nature Link
Author	Macdonald, John R. Frommer, Ian D. Karaesmen, Itir Z.
Copyright Year	2013
Abstract	The beer game has been used to emphasize, investigate, and analyze supply chain inefficiencies as well as the effect of decision makers’ biases. This paper investigates the short- and long-run performance in the beer distribution game by analyzing Sterman’s (Manag Sci 35(3): 321–339, 1989) model that simulates decision-making. In this model, the system may have chaotic behavior depending on the heuristics used by decision makers. We investigate how quickly the system reaches a steady state (if at all). It is known that ignoring supply line (outstanding orders) leads to the bullwhip effect in experimental research. Among other results, we show that the short-term performance of a supply chain is not a predictor of the long-term performance even when decision makers fully recognize outstanding orders. Results of the simulation and practical implications are discussed.
Starting Page	119
Ending Page	126
Page Count	8
File Format	PDF
ISSN	19369735
Journal	Operations Management Research
Volume Number	6
Issue Number	3-4
e-ISSN	19369743
Language	English
Publisher	Springer US
Publisher Date	2013-12-15
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Beer distribution game Chaos Decision making Simulation Production/Logistics/Supply Chain Engineering Economics, Organization, Logistics, Marketing Industrial and Production Engineering Operations Research/Decision Theory Management/Business for Professionals Innovation/Technology Management
Content Type	Text
Resource Type	Article
Subject	Industrial and Manufacturing Engineering Management Science and Operations Research Strategy and Management Management of Technology and Innovation

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