The Supply Chain Simulation Game Gal Raz Darden School of Business, University of Virginia

The Supply Chain Simulation Game

Gal RazDarden School of Business, University of Virginia

2012 Utah Operations Winter Conference

Supply Chain Management Elective

Jan 18 (Wed) Jan 26 (Thu) Feb 1 (Wed)

Introduction to Supply Chain Management

Supply Chain Network Design

(K&S)

Data Rich Management

(SEJ)

Feb 2 (Thu) Feb 8 (Thu) Feb 15 (Wed) Feb 16 (Thu) Feb 22 (Wed)

Sourcing from an Ops / People Perspective

(K&S China (B))

No Class Aligning Incentives in Supply Chains (Blockbuster)

The Negotiations Exercise (Uncle

Coco Magic shop)

The Supply Chain Game – Part 1

Feb 23 (Thu) Feb 24 (Fri) Mar 1 (Wed) Mar 8 (Wed) Mar 9 (Thu)

The Supply Chain Game – Part 2

The Supply Chain Game – Debrief

Recycling and Reverse Logistics

(Sandvik)

Green Product-Service Systems

(Netafim)

Green Product-Service Systems

(Better Place)

Jan 19 (Thu) Jan 25 (Wed)

Outsourcing and Offshoring (Timbak2)

Sourcing from an Ops / People Perspective

(K&S China (A))

* The Negotiation Exercise on Thursday February 16th and the Supply Chain Game on Wednesday and Thursday February 22-23 will be from 2:45pm to 4:45pm and thus there will be no class on February 8

Main Learnings

Managing a global supply chain that competes by making timely decisions of pricing, ordering, and logistics that impact both the market and competitors

The impact of supply chain contracts on supply chain and individual firm performance

Negotiation under asymmetric information

Supply chain strategy (responsiveness versus efficiency)

The SC Simulation Game

Procedure

The game is played with competing teams of 4–8 players

Each team has four roles: a Retailer, Wholesaler, Distributor, and Manufacturer

The game is played for up to 96 weeks (2 simulated years)

The SC Simulation Game

The flow of product and orders

Manufacturing and transport takes 1 or 2 weeks.

Orders are received immediately

Manufacturer Retailer

Customers

WholesalerDistributor

The Decisions

Weekly: Order quantity Mode of transportation (trucks vs planes)

Quarterly: Retail Price

Half Yearly: Supply Chain Contract Negotiations (Revenue Sharing or

Wholesale Pricing Contracts) Information System

The SC Game Interface

Retailer Screen

The SC Game Interface

Distributor Screen

Contract Screen (RS Contract)

12

Quarterly Reports

The SC Game Debrief

Market Strategy – Pricing and market share Supply Chain Strategy – Ordering, using fast

mode of transportation (Responsiveness vs efficiency), coordinated ordering

The Supply Chain Contract Wholesale pricing contract Revenue sharing contract

Use of Information Sharing Individual vs Supply Chain Profit

Market Strategy

Supply Chain Strategy

Team 1 Team 3

Revenue-Sharing contract versus Wholesale-Pricing contract

What is the goal and impact of the revenue sharing contract? What is the optimal revenue sharing contract?

What is the impact of the Asymmetric Information?

The Supply Chain Contract

Administrator Interface