*) See Wikipedia to learn what Beer Distribution Game is.

I was once an engineering student and this is an application of simple Newtonian physics to a complex business problem.

So, what's the problem we are trying to solve? Basically, inventory levels in supply chain fluctuate in volatile ways because it's like a feedback system with each node responding to its own current inventory level, just like a system of springs/coils with a weight at the end of the linkage. Imagine a car's suspension system only had springs without dampers; it will jump up and down like crazy. The suspension system of a car works fine because of its DAMPERS, which respond to the velocity of fluctuation rather than its displacement.

So, I thought adding "dampers" to a supply chain would repress the fluctuation of inventory levels. To give the quick result, IT WORKED BEAUTIFULLY.

Click on each menu item sequentially to explore my findings. The pages are basically my email messages to some members of Santa Fe Institute Business Network, so they are not properly formatted as an academic paper, but the validity of the study should be descent.