Study On The System Dynamics Model Of Inventory Management In Hongyu Corporation

Inventory exists everywhere and anywhere in the enterprise, the quality of the inventory management immediately influences the enterprise's survival and development, therefore, strengthening the research of enterprise's inventory management has the tremendous significance.This paper is based on the analyzing the features and the questions of inventory management of successive manufacturing enterprises, using the inventory management theory and the system dynamics theory, on the assumption of combining actual situation of inventory management of Hongyu Corporation, analyzes the relations of kinds of factors which affect the inventory management, using the system dynamics method, establishes the causality graph of kinds factors which affect the inventory management in Hongyu Corporation, including the causality graph of cooperation part inventory management, semi products inventory management, profit and the whole inventory management in Hongyu Corporation. Based on the causality graphs, the paper establishes the system dynamics model of inventory management of Hongyu Corporation, using the VENSIM simulation software, contacts the different factors together, defines the variable's initial value and establishes a series of equations of system dynamics. Through the simulation test and the analyzing of simulation results, it indicates that the system dynamics model is steady and effectiveness. Finally, using the Hongyu Corporation's real data verifies that the inventory management model is very accurate and reasonable; furthermore, it proves the practicability of the inventory management model.The system dynamics model of inventory management in Hongyu Corporation which was built in this paper is accurate and steady, especially satisfied to the practical production of Hongyu Corporation and successive manufacturing enterprises, it greatly helps to raise the inventory management level of Hongyu Corporation, so this model has great significance in both theory and reality for inventory management of successive manufacturing enterprises.