KEVIN SHANG

The pedagogical objective of the Cash Beer Game is to let students understand the challenge of managing inventory and cash simultaneously, and how cash flow influences the inventory order decision. Students have to trade off not only the holding cost rate and the backorder cost rate, but also the interest gains and borrowing costs by choosing a right portfolio of assets (i.e., cash and inventory). To that end, we emphasize the importance of working capital management. We also introduce the optimal control policy, referred to as working-capital dependent base-stock policy. The key insight of the game is that when financial constraints exist, firms should be more conservative in making operational decisions. Financial integration strategies, such as fintech platform, cash pooling, subsidies, etc., can be discussed through this game... The Cash Beer Game is played similarly as the Beer Game. There are four players in a team, with each player on a team representing a role in a simplified..

Also known as: Cash Beer Game