A demand and supply game exploring global supply chains

• Main Author: HONG, Bei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: Active learning; Classroom Experiment; Demand and Supply; Global Supply Chains; Macroeconomics; Operations and Supply Chain Management
• Online Access: https://ink.library.smu.edu.sg/soe_research/2359; https://ink.library.smu.edu.sg/context/soe_research/article/3358/viewcontent/A_demand__PV.pdf
• Institution: Singapore Management University

In this article, the author describes a classroom experiment in which participants make decisions to achieve the lowest-cost production. Student volunteers acting as smartphone companies are provided with confidential information representing their own cost of production and are asked to make trade decisions to form a supply chain at the lowest possible cost. This interactive classroom experiment facilitates an understanding and appreciation of the basic demand and supply model. Students also explore the motivations, facilitators, and impediments of global supply chains. Suggestions are made to expand the game by incorporating more sophisticated models of the global supply chain, and also ways in which it can explore aspects of economics such as transportation costs, oligopoly and the narrowing wage gap between Eastern and Western economies.