Effectiveness of a Multi-Agent Cooperation Game in a Multi-Stage Supply Chain

—Beer Game Experiment—

Abstract

In supply chain management, the bullwhip effect leads to an increase in costs and opportunity loss risk, and imposes a significant burden on company management. Therefore, controlling the bullwhip effect in the supply chain is an important issue. The common strategy and information sharing among companies are effective in reducing the bullwhip effect. These effects have been shown in many studies. However, in recent years, in the increasingly complex supply chain, it is very difficult for each company to have an accurate and timely understanding of the information that affects their actions. This makes it difficult to share information and common strategies throughout the supply chain. This study considers a model of cooperation between some companies in the supply chain to share information and common strategies. Studies that aim to reduce the bullwhip effect and the total cost in the supply chains involve demand forecasting, inventory policy and safety stock optimization. The proposed model focuses on improving company strategies by combining multiple strategies and analyzes which policies and actions improve the performance of the entire supply chain. In this study, a multi-stage supply chain model is constructed using multi-agent simulation to identify the optimal strategy by analyzing the effect of cooperation between companies in terms of the bullwhip effect and the total cost. This study identifies a tendency for an the optimal strategy to be used by each company. In addition, the results will be validated by a beer game demonstration to examine effective strategies in a real supply chain.