This module details an assignment using the Near Beer simulation developed by Forio Business Systems to demonstrate the challenges of managing supply with consumer demand. This interactive simulation allows students to input raw material amounts and subsequently see the effects on output as new customer orders come in and shipments go out. Students must try to balance inventory with demand, or at least try to avoid stockouts or excess inventory levels.
Type of Material:
This material could be used in an undergraduate class to demonstrate supply and demand issues. The author suggests using it in a principles of marketing course during the discussion of supply chain management, perhaps midway through the discussion as a way to apply the material. It would also be useful in a retailing or business-to-business marketing class.
It also could be used for at-home use with follow-up classroom discussion. The assignment can be used with small groups, but the larger learning benefit appears to go with individual usage.
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Identify Major Learning Goals:
As stated by the author, the learning goals are to: (1) analyze the factors affecting inventory equilibrium in the supply chain, and (2) discuss factors that impact supply chain management decisions.
Target Student Population:
This module is most appropriate for high school or undergraduate students taking a Principles and/or Supply Chain Management course.
Prerequisite Knowledge or Skills:
A basic understanding of supply and demand would be helpful.
Evaluation and Observation
Supply chain management can often be a less-enjoyed part of class, however this module makes it timely, enjoyable and worthy of students taking notice. The simulation is well-designed, is rooted in a core concept, and makes the point very easily and interactively. The module itself is fairly flexible, and is very relevant to any marketing education, as the assignment is self-contained, and provides great insight in an efficient way. Instructors and students alike can appreciate the quality of this module, and find it a meaningful part of the course.
The author of the assignment provides substantial information for instructors. Excellent discussion questions are provided for use in class or as homework assignments, such as "What inventory shortages and lost orders did you experience?" Numerous suggestions for classroom use are offered. For example, the author recommends grading students on their analysis of their decisions rather than on how long it takes them to balance the inventory.
Little information is provided about the expert level. Initially, I wondered if this might be useful for the MBA level, but it was difficult to tell. I tried going from the novice to the expert level but did not see a noticeable difference in the game other than the number of cases ordered by customers per week.
Potential Effectiveness as a Teaching Tool
Supply chain management can often be a “boring” concept for students. This module takes the topic to an enjoyable and engaging level, and provides the student with a real-world experience. By asking students to adjust supply levels to meet demand, they are challenged to do so in a timely fashion. The “game” concept is highly interactive, provides much food-for-thought and should provoke lively classroom discussion. The simulation has both a novice and an expert level, making it versatile for multiple courses/student understanding, and the associated questions provide much for the student to consider. This module is one of the clearest and most concise ways I’m aware of to get students interested in this topic.
This simulation has the potential to clearly demonstrate the difficulty associated with matching inventory and demand. As a former retail buyer, I find this tool a realistic approximation of the purchasing process. Students will see first-hand how a small change one week can result in a large change later.
As noted by the author, students might get frustrated as they face difficulty achieving balance between supply and demand.
Ease of Use for Both Students and Faculty
This module assignment and accompanying notes are easy to follow and make it exceptionally simple to incorporate this into a course plan. The website is understandable, engaging and walks the student through the ramifications of his/her decision. The clear results of each supply chain decision, plus the associated assignment questions, provide much for the student to think about, and connects the importance of supply chain management in a wonderfully dynamic way. This appears to be a solid exercise for students, and would be an efficient use of course time.
The direct link to the simulation no longer works. I was able to do a quick browser search on "Near Beer" to find the simulation, but this needs to be fixed.
Other Issues and Comments:
The author notes that the free simulation is available for only a few days; she recommends that students finish the assignment in 2-3 days to avoid having work lost.
I found this simulation and the accompanying materials very useful and look forward to using them in my classes.