beersupply

MBMA 6875

Beer Supply Chain Simulation Assignment

Background: This assignment will build on the beer supply chain online simulation concepts and experience you have completed. Review the information provided in this module concerning the supply chain bullwhip effect ( Video: Bullwhip (Forrester) Effect: How Sudden Demand Increases Affect Supply Chains). Many of you experienced this phenomenon as you conducted the simulation. Consider the definition of the bullwhip effect and how this phenomenon impacted the results of your supply chain cost in the simulation.

Assignment: The simulator provided you with graphs at the end of the simulation for each supply chain tier. Per the simulation instructions, you should have captured those graphs for use in this assignment. Answer the following questions in a double-spaced Microsoft Word document (no other file formats will be accepted) to be submitted to the appropriate dropbox in D2L.

1. Consider the “Order Behaviour” graph first for all tiers of the supply chain. Provide an analysis of the trends exhibited in the “Order Behaviour” graphs (Hint: trends are patterns in the movement of different data series or lines in graphs. For instance, if two lines move in the same direction, you can conclude that the two data series exhibit a correlating trend).

Review the information concerning how to describe trends in graphs found at the following link:

https://www.ilc.cuhk.edu.hk/files/ChartsGraphs_Gilhooly.pdf .

Identify all occurrences of the Bullwhip Effect evidenced in the graph by providing the week numbers identifying where the effect begins and ends. Describe any other trends or correlations of the data series.

2. What are the most interesting issues you observed during the simulation (minimum of two)? Correlate your observations with at least two of the graphs to support your answer. For example, provide an analysis of which tier of the supply chain performed best and why or which tier of the supply chain was most impacted by bullwhip effect occurrences. You must do more than state the obvious. You must provide supporting evidence for your observations.

3. What have you learned from the simulation? You must provide a logical and reasonable answer to this question based on concepts that you have learned. You should explain the concept and how you learned the concept from the simulation.

4. This assignment has given you some insight into how ordering behavior can impact all tiers of the supply chain. Read the material on page 3 of this document.

Consider how COVID-19 has affected supply chains. Give an example of two different types of shocks that have affected supply chains. (You must choose two different types of shocks. For example, You cannot describe 2 different negative supply shocks.

5. Record your performance, the student who reports the best performance for the entire supply chain will earn a perfect grade on this assignment. All you will have to share is what your strategy was to achieve that performance.

Provide analysis and answers to all four items above. Include images of all your graphs where appropriate IN your Word document placed for a professional appearance to support your answers where necessary.

Create a Microsoft Word file.

· Only MICROSOFT WORD COMPATIBLE FILES WILL BE ACCEPTED. All other file formats (*.pdf, *.pages, *.xls, *.ppt) will not be graded and you may be responsible for any late penalties associated.

Submit only ONE Microsoft Word compatible file to the dropbox. Embed all diagrams into your Microsoft Word Document.

Use good grammar and spelling. Get help if you need it (Grammarly is one option provided to Jones College of Business students at no cost). Your grade factors in grammar, punctuation, and writing style. I highly suggest you proofread and spell-check your document.

Supply and Demand Shocks

In the context of economic markets, anything that unpredictably affects the market in a large manner is considered a shock.

Supply Shocks

The supply of goods and services are often the ones who face shocks, though they can affect producers and consumers alike.

Negative Supply Shock

· Causes the quantity supplied to be rapidly reduced, and the price to increase quickly until a new equilibrium is reached.

· A good example of this would be any natural disaster or other unanticipated events that disrupt the production process and/or supply chain. An instance of this would be Hurricane Katrina’s detrimental effect upon the oil and gasoline industry: oil rigs, refinement plants, and pipelines were either shut down or taken offline.

· A hypothetical example of this could be if a key resource input of a firm’s production process was found to have a much more valuable application in another use, then the cost of the input would rise. For instance, if a pipe-fitters firm’s production process used metal that the microchip industry found a novel use for, the price of that metal would increase. Thus the number of pipes supplied would fall, and their price would increase.

Positive Supply Shock

· These usually come in the form of overnight technological advances that quickly improve the productivity of labor and the return of capital. These improvements cause the quantity supplied to increase and the price to fall. For instance, this age of computers and robots has represented an unprecedented increase in productivity that goods can be mass-produced on a massive but relatively inexpensive scale.

· It could also occur if a new, cheaper substitute for an expensive production input is found—for instance, the discovery of a seam of low-sulfur coal out in Powder Basin, Wyoming.

Demand Shocks

Though often considered as solely an issue on the supply side, shocks can affect demand as well. Demand shocks are also commonly perceived to come about because of changes in consumer preferences, but they can also be linked to changes in other factors of demand like the price of complements and substitutes.

Negative Demand Shocks

· These cause less quantity of goods to be consumed, and those consumers still in the market pay a lower price for the good. An example of this would be if a medical journal reported that a widely used prescription drug appreciably increases your chances of cancer. Then there would be a sharp shift in demand with fewer goods being consumed at a lower price.

Positive Demand Shock

· Conversely, this type of shock can cause more goods to be consumed at a higher price. Consider the combined effects of two simultaneous events upon the demand of two complements, fish and tartar sauce: a new nutritional study conclusively touts the many health benefits of eating fish, and there are commercial fishing efficiency advances that make fish inexpensive. More people will want to eat fish, leading them to buy more tartar sauce even though it’s now at a higher price.

* From http://www.econport.org/content/handbook/Equilibrium/shocks.html

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