by David Corben

History
The beer game was developed at MIT in the late 1960s, to introduce management students to the ideas of system dynamics. It has been played thousands of times by students (graduate and MBA) from top business schools and managers from a wide range of organisations. The Beer Game forms the basis of chapter 3 of The Fifth Discipline by Peter Senge, 1990.

Beer Game Overview
The Beer Game is a role playing board game based upon an aggregated four staged production and distribution system. The game is played in teams of four and lasts for 50 simulated weeks. Each team member plays one of the board positions (retailer, wholesaler, distributor and factory) and has to decide how much beer to order from their supplier or in the case of the factory how much beer to produce.

The Aim of the Game
The aim of the game is to minimise total costs for the whole team over the 50 weeks of play. The team with the lowest total costs is the winner.

Individual Costs
Cost of inventory (stock) is £0.50 per case per week.
Cost of backlog (orders outstanding) is £1.00 per case per week.

Team Costs
Retailer’s Costs + Wholesaler’s Costs + Distributor’s Costs + Factory’s Costs

Suggested Reading
The Fifth Discipline:The Art & Practice of the Learning Organization by Peter M. Senge published by Doubleday Currency, New York 1990

Further Information
The Beer game is produced and distributed by the International System Dynamics Society.

See details of our Workshop on The Beer Game and Introduction to Systems Thinking.