Computer Player Orders Calculation

One of the great features of our Beer Game is that the software recognizes automatically which role is not filled by a human player, and the computer fills that role automatically.

Also if you use the Timer to keep your session schedule, the computer takes over for the roles that still hadn't decided when the clock reaches 0.

In both cases, a computer-player needs to decide the quantity to order to his supplier (or to produce for the Manufacturer). The calculation we have implemented is based on a simple MRP-like reorder rule. It also aims at simulating the human reactions that arise during the game, leading to the bullwhip effect.

The computer order quantity depends on:

• The Current Stock or quantities in backorders,
• The Objective Stock: it is defined as the starting stock at the beginning of the simulation (by default: 12),
• The Lead Time (by default 3 weeks),
• The Average Demand (weekly) received from its internal client,
• The Incoming quantities already planned for delivery.

Now here is the calculation:

Note that:

• The Backorder Multiplier is by default 1.5 : this is meant to "over amplify" backorders, simulating the typical human over reaction due to fear of missing. But when the game is setup with Transparent Mode, the Backorder Multiplier is kept at 1 => the computer will just reorder what is needed to fulfill his backorders and reach back its objective stock.
• The Average Demand is based on the weekly average for the past lead time duration (by default it takes the average demand received from his client for the past 3 weeks). But in Transparent Mode, the average demand considers the demand received since the beginning => this lead to smoothed quantities and less over-reaction.
• The Incoming Quantities only consider the shipped quantities incoming in the trucks. So if the computer's supplier has backorders they are not considered, leading to amplified orders. This is a typical issue for humans as well: we tend to forget or not consider all the quantities ordered previously. When playing in Transparent Mode, this is corrected: the computer considers quantities in the trucks and also the potential backorders at his supplier.

To help you understand better the computer calculation in our Beer Game, we have built an Excel file simulating a full game. Both in the Default and Transparent modes.

→ Download the Excel Computer-Player Simulation

If you let the computer play the game alone (by using the timer for example), you should reach the same results 😉