Learning Supply Chain Management with Fun:

An Online Simulation Game Approach

Keli Feng
St. Cloud State University, St. Cloud, MN
Guohua Ma
South Carolina State University, Orangeburg, SC

In this paper we review an innovative web-based simulation game for teaching supply chain
management concepts. Different from many existing turn-based simulation games, this game
simulates a real-world 24/7 environment where students can make supply chain decisions and apply
knowledge learned in class. We also discuss how to integrate this educational game into an
undergraduate supply chain management class. The game was evaluated in an undergraduate supply
chain management class at an AACSB school. The student evaluations indicate that most of the
students enjoyed playing the game and preferred this simulation game approach to traditional
teaching methods.

I. INTRODUCTION In this paper we introduce an online simulation

game, Supply Chain Game, developed and
As more and more companies and schools hosted by Responsive Technologies
recognize the strategic importance of supply (www.responsive.net). In this game, students
chains, supply chain management courses have can actively manage a supply chain on a
become popular in many business schools and continuous basis, develop a set of supply chain
some engineering programs. Designing a related managerial skills, and apply theories to
balanced curriculum is crucial for teaching the practice.
subject effectively; the curriculum used by many The objective of this paper is to describe
top graduate business schools is dominated by and review the online Supply Chain Game and
case discussion and supplemented with lectures illustrate how the game approach helps students
and guest industry speakers (Johnson and Pyke, learn supply chain management concepts
2000). These traditional teaching methods can actively and effectively. The paper describes the
help students understand supply chain important aspects of the game and explains how
management concepts, but they cannot replicate professors may effectively integrate this game
the dynamic 24/7 environment supply chain into their teaching curriculums.
managers must face. The remainder of this paper is organized as
Online simulation games are alternative follows. Section 2 briefly reviews the related
educational and training method, which can literature on supply chain management
simulate a real-world 24/7 environment and keep simulation games. Section 3 introduces the
a balance between theory and practice. With the Supply Chain Game and students’ reactions.
advent of internet technology, online simulation Next, we discuss on the link between supply
game has recently become a more and more chain management concepts and the simulation
popular teaching tool for students to be actively game in Section 4. Section 5 presents tips on
involved in the educational and training process. teaching and grading. The students’ evaluations

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 Feng and Ma
Learning Supply Chain Management with Fun: An Online Simulation Game Approach

and instructors’ work load will be discussed in oriented supply chain management principles,
Sections 6 and 7, respectively. The paper but their homegrown game is not commercially
concludes with a summary of the game. available. Trading Agent Competition Supply
Chain Management game (TAC/SCM, 2002)
II. LITERATURE REVIEW was well-known among researchers, but it is not
suitable for teaching purpose.
Few simulation games are available for teaching More recently, Corsi et al. (2006)
supply chain management. The most well- developed a “Distributor Game”, which focuses
known game, beer game, was developed at MIT on the distribution process in a global real-time
in the 1960s to demonstrate the bullwhip effect supply chain. Different from other turn based
in an inefficient supply chain. The early version simulation games, this game replicates a real
of beer game is a board game, which can be world experience on a 24/7 basis. The game is
played in class but consumes a significant still in the testing phase and is not commercially
amount of class time. The most recent versions available for interested supply chain instructors.
are played with computers through the internet After reviewing the existing supply-chain
and include a computer game developed by games, we realized that the Supply Chain Game
Simchi-Levi et al. (1998), an internet version by developed by Responsive Technologies does not
Jacobs (2000), a beer game with stationary have the limitations of other games. The game is
demand by Chen and Samroengraja (2000), a completely web-based and played in real time
near beer game (2003), and a modified beer (not turn-based). The game is also commercially
game by Sparling (2002). Despite thee updates, available and affordable by students.
the limitations of the beer game are twofold.
First, the game only focuses on a specific III. DESCRIPTION OF THE SUPPLY
principle of supply chain: the bullwhip effect CHAIN GAME
and its causal factors. Second, the game is a
turn-based game, which means that during the The Supply Chain Game is an internet based
game participants make a decision, submit that supply network simulator, which was developed
decision, and then later receive response on their by Professors Sunil Chopra and Philipp Afeche
performance and the consequences of their at the Kellogg School of Management at
decisions. This method fails to replicate the Northwestern University and adopted by schools
continuous nature of the real world. in 2005. During the simulation game, teams of
Another turn-based game was recently three to five students control a virtual company,
developed by the Harvard Business School. This Jacobs’ Industry, which produces an industrial
interactive online simulation game allows chemical that can be mixed with air to form
students to manage the complexities of a global foam. Student teams expand and manage the
supply chain in a mobile phone company company’s supply network on the fictional
(Harvard Business School, 2004). However, continent of Pangea and an adjacent island of
students still gain limited experience in dealing Fardo (See Figure 1). Each student team has
with a 24/7 global supply chain environment. identical demand and supply information and
Other simulation games illustrate supply chain makes decisions on demand forecasting,
principles, but have some limitations. Jackson production and inventory control, supply
(1995) designed a distribution simulation game network design, and transportation options.
in a two level distribution supply chain. The supply chain game consists of two
However, the game is turn based and cannot be assignments: one region game and network
played online. Anderson and Morrice (2000) game, each of which lasts for one week. For
proposed a simulation game to teach service each assignment, the student teams’ objective is
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Learning Supply Chain Management with Fun: An Online Simulation Game Approach

to maximize their cash balance generated by the very high and fail to recognize how to use
foam technology over the simulation periods and buildup inventory to meet seasonal demands.
minimize the inventory. At the end of the game Other teams performed better because they made
the team with highest cash balance wins. Each good use of seasonal inventory and set their
assignment is briefly described below. capacity to a reasonable level (around mean
forecast demand).
FIGURE 1: MAP OF SUPPLY CHAIN The continuous review inventory model is
GAME used for inventory control in this game.
Production of a batch is triggered when the
finished goods inventory falls below the reorder
point set by student teams. Some student teams
use the continuous review model taught in class
to calculate the order quantity and reorder point,
the two parameters. But the calculated
parameters may not always be applicable
because the seasonal demand violates certain
model assumptions. As a result, student teams
use the calculated parameters coupled with trial-
and-error to dynamically make their inventory
decisions.
The virtual Jacobs industry hires a third
1. One Region Game
party logistics provider and ships the drums
In the one region game a single factory and a
from factory to the warehouse as soon as
single warehouse operate in the region of
production is complete. The warehouse sends
Calopeia (see Figure 1). Headquarter holds
drums to customers once orders are received.
relevant demand and financial information,
The drums can be shipped either by truck or by
which is available for the past two years at the
mail. The trucking option is cheaper if the
beginning of the game. Demand for the
factory ships drums on full trucks, while the
company’s chemical product occurs only in the
mailing option has higher shipping rates.
Calopeia region and is very seasonal, peaking in
Students also know the fact that new foam
the summer and reaching a low point in the
technology is under development at Jacobs and
winter months. Customer orders arrive randomly
all production capacity and inventory of the
during the day and order size (number of drums)
current foam will be obsolete and worthless at
varies. After learning forecasting techniques in
the end of the game. Most student teams reduce
class, most student teams can recognize the
or stop production at the end of the game to
importance of demand forecasting and apply
minimize the risk of excessive leftover
those forecasting techniques to this game.
inventory. Student teams also recognize the need
At the beginning of the game, the factory’s
to switch from trucking to mailing at the end of
production capacity is set to 20 drums per day,
the game in order to reduce transportation costs.
which is significantly below average demand.
Compared to the second network game, the first
Additional capacity can be purchased but it is
game is relatively easy and requires fewer
costly and such an expansion takes three months
supply chain related decisions. But the purpose
to complete. All the capacity can’t be retired or
of the first game is to familiarize students with
salvaged at the end of the game. Most students
the game’s instructions and basic problems.
figure out the initial production capacity is
Once they finish the first game, students are
insufficient and they need to add capacity to
more confident playing the network game,
meet demand. Some teams set the capacity level
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Learning Supply Chain Management with Fun: An Online Simulation Game Approach

which is more complicated and involves more covered in class to decide which warehouses
supply chain decisions. should serve each target market and how to
minimize transportation costs from factories to
2. Network Game warehouses.
In the network game, Jacobs Industry wants to
expand into all five regions of fictional continent FIGURE 2: SAMPLE NETWORK GAME
(see Figure 1). Students begin the game with two SOLUTION
years history of demand in Calopedia, which is
identical to demand in the first game, and a 90
day history of demand in the other four regions.
Except for the linear demand in Sorange, the
expected long-run demand pattern in other three
regions is non-seasonal, neither upward nor
downward.
Facing the new markets’ demand, student
teams need to decide when and where to build
new warehouses and factories to balance supply
and demand. Students are told that it takes 90
days to either construct a new factory or to add
capacity to an existing factory and it takes 60
days to build a warehouse. Before students make
As in the first game, new technology will
any expansion decisions, they should consider
replace the current one and demand for the
the construction time. Most students also
current technology will reach zero at the end of
recognize that the factory and warehouse in the
the simulation. In the first game most student
Calopedia cannot effectively satisfy the demand
teams ramp down production and reduce
from all regions. Some student teams adopt a
inventory to prevent obsolescent costs at the end
wait and see strategy and simply react to
of the game. Figure 2 shows a student team’s
demand. Better student teams use break-even
solution, with a final cash position of
analysis to estimate the break-even order
$23,421,019.87, at the end of the network game.
quantity for a new factory/ warehouse. They
then compare the estimates to regional demand
IV. LINKAGE BETWEEN SUPPLY CHAIN
to decide if they should add a factory/warehouse
CONCEPTS AND THE GAME
in each region.
Like in the one region game, the
The Supply Chain Game offers a great
continuous review inventory model is used to
opportunity to link different real-life scenarios to
control production and inventory in factories.
a variety of concepts and techniques that are
Student teams decide how to schedule
critical to managing supply chains in the real
production in each factory and how to manage
world. These concepts and methods include
inventory in the supply chain. The shipping
demand forecasting, inventory control,
options are the same as in the first game, but
production planning and scheduling, network
shipping rates and lead times are different for
design, and logistics. Traditionally, these
different regions. Most student teams figure out
concepts are taught in a certain order according
prioritizing shipping in each warehouse so they
to a textbook, but the simulation game helps
can first meet the more profitable local demand
students dynamically link them together as an
and then meet demand outside of the region.
integrated skill set. Table 1 summarizes the
Better student teams use transportation methods
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Learning Supply Chain Management with Fun: An Online Simulation Game Approach

linkage between supply chain management discussion summarizes the important learning
concepts and the game. points for each simulation game.
To integrate the game into an We assess the students’ learning using
undergraduate supply chain management course, three aspects of performance: the write-up
instructors should cover forecasting and report, the simulation performance, and the team
inventory control concepts before students play presentation. The grading distribution is 60%
the one region game. Typically, capacity report, 20% performance, and 20% presentation.
management and break-even analysis have The report should describe the student teams’
already been covered in an introductory actions and analyze whether other choices would
operations management; however, instructors have allowed the teams to do even better. The
may review these concepts before the first game. report is graded based on the effectiveness of
Likewise, the concepts for the network game students’ explanation and application of
should also be covered in class before the game knowledge learned in class. The performance
starts. portion is based on student teams’ final cash
balance and is designed to give student teams
V. LINKAGE BETWEEN SUPPLY CHAIN incentive to obtain better cash positions. The
CONCEPTS AND THE GAME presentation component is graded on students’
ability to effectively present their analysis. In
The Supply Chain Game requires less lecture addition, the total weight of the simulation game
time for instructors. Several days before the accounts for 15 to 20 percent of students’ final
game starts, a 30 minutes in-class introduction course grade.
should establish the basic setting of the game
and the instructor’s expectations. If possible, a V. TEACHING AND GRADING
computer lab session is very helpful to allow
student teams to explore the game and ask The Supply Chain Game requires less lecture
questions about it. Also students should have time for instructors. Several days before the
access to a history of the game before the game game starts, a 30 minutes in-class introduction
actually starts, so they can develop strategies in should establish the basic setting of the game
advance. After each game, a follow-up in-class
TABLE 1: LINKAGE BETWEEN SUPPLY CHAIN GAME AND SUPPLY CHAIN
MANAGEMENT CONCEPTS
Game Game Attribute Supply Chain Management Concepts and Methods
Seasonal demand Winter’s model, Box Jenkins technique.
Factory capacity Different capacity management strategy: Proactive,
One region planning reactive, and straddle strategy.
game Factory inventory Continuous review inventory model with reorder point
planning and order quantity
Transportation planning Financial analysis and break-even analysis
Supply chain strategy Fisher’s supply chain management strategy matrix,
efficient or responsive supply chain
Demand in different Regression analysis, moving average, simple
Network regions exponential smoothing, Holt’s model, Winter’s model
game New warehouses and Break-even analysis, cost benefit analysis, risk pooling,
factories decisions network design
Transportation network Cost benefit analysis, transportation mode selection,
and planning transportation method of linear programming

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Learning Supply Chain Management with Fun: An Online Simulation Game Approach

and the instructor’s expectations. If possible, a VI. STUDENT EVALUATION

computer lab session is very helpful to allow
student teams to explore the game and ask To assess the effectiveness of the simulation
questions about it. Also students should have game, we conduct a student evaluation survey in
access to a history of the game before the game an undergraduate supply chain elective class at
actually starts, so they can develop strategies in an AACSB accredited school. Most of the
advance. After each game, a follow-up in-class students were management majors in their fourth
discussion summarizes the important learning year of college. Most students had completed an
points for each simulation game. introductory class in operations management
We assess the students’ learning using before taking this course, but none had
three aspects of performance: the write-up experience playing web-based simulation games.
report, the simulation performance, and the team The students were between 20 and 25 years old.
presentation. The grading distribution is 60% Based on the research of Ruohomaki
report, 20% performance, and 20% presentation. (1995) and the reference listed in his paper, we
The report should describe the student teams’ designed and outlined nine survey questions to
actions and analyze whether other choices would understand the effects of simulation game on
have allowed the teams to do even better. The three levels: effects on individuals, effects on
report is graded based on the effectiveness of group behavior, and effects on later activities.
students’ explanation and application of Listed in Table 2, the survey questions asked
knowledge learned in class. The performance students to rate different aspects of their
portion is based on student teams’ final cash experience with the game on a five-point Likert
balance and is designed to give student teams scale, with 5 indicating “strongly agree” and 1
incentive to obtain better cash positions. The indicating “strongly disagree”. The first four
presentation component is graded on students’ questions were designed to evaluate effects on
ability to effectively present their analysis. In individuals, such as cognitive learning outcomes
addition, the total weight of the simulation game and impacts of the game on participants’
accounts for 15 to 20 percent of students’ final attitudes. The fifth question focused on the
course grade. effects of the game on groups of participants.

TABLE 2: STUDENT EVALUATIONS

Average
Number Survey question
score
Simulation game helped in understanding basic concepts in supply chain
1 4.06
management
The game increased my interest and knowledge about supply chain
2 3.94
management
I frequently found myself actively thinking about the simulation game and
3 4.09
what decisions I should make
4 The game improved my decision-making and problem solving skills 3.94
I better communicate and cooperate with my group members and share
5 4.03
knowledge with them via the game
6 I applied the lessons learned from the game to the real-life situations 3.72
7 The game is a positive contribution to the curriculum 4.06
8 I prefer the simulation game approach to conventional teaching methods 4.13
9 I recommend the game for future operations management courses. 4.09

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Learning Supply Chain Management with Fun: An Online Simulation Game Approach

The sixth question tested the transfer of skills, ensure all students’ registration before the game
the generalization of knowledge, general starts. Instructors may help students register
principles, or application of skills from the game their teams during a computer lab session or
to a variety of real-life situations. The last three office hour, for example.
questions were designed to examine the efficacy Finally, grading requires a significant amount
of the simulation game compared to other instructor time. If group presentations are
teaching methods. required, instructors also need to evaluate them.
Based on 32 students’ responses, we Depending on class size, the grading time may
tabulated the average score for each survey vary from several hours to days.
question as shown in Table 2. The results were
positive for all effects of simulation game. Most VIII. CONCLUSIONS
of students thought the simulation game helped
them better learn supply chain management, As an excellent complement to traditional
effectively communicate and cooperate with teaching methods, the Supply Chain Game is an
their group members, and apply the knowledge effective and appropriate pedagogical approach
to the real world. Students clearly preferred the for teaching supply chain management concepts.
game approach to other teaching methods. The The simulation game provides students with a
sixth question has the lowest score among the hands-on opportunity to apply knowledge and
nine questions, which may be because most concepts in a real world 24/7 environment.
undergraduate students, particularly those who Students interact with the game and immediately
are not working, do not have opportunities to see the impacts of their decisions on a supply
apply the lessons learned from the game to the chain. After playing the game, students better
real-life situations. understand supply chain concepts and effects of
their decisions on inventory, distribution, and
VII. INSTRUCTORS’ WORK LOAD profit. According to student evaluations, most
students enjoy playing the game and prefer this
Instructors have three types of work: technical, simulation game approach to traditional teaching
administrative, and grading. Based on our methods.
teaching experience, these work loads are
relatively moderate. First, instructors should IX. REFERENCES
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Learning Supply Chain Management with Fun: An Online Simulation Game Approach

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