Study On The Supply Chain Simulation Based On System Dynamics And Contract Theory

With the global economic integration and the rapid development of information technology, the customer increase of personalized demand has intensified the competition among enterprises. And since there are great changes in social, economic and political environmental aspects of the great changes, the uncertainty of market demands have greatly increased. Facing a rapidly changing and unpredictable buyer's market, relying on the resources of individual enterprises have been unable to respond quickly to customer needs. Enterprises should be a union for the common benefit of a strategic alliance to create a business from suppliers to manufacturing and then to distributors throughout the supply chain of all enterprises, through the complementary strengths to gain collective competitive advantage, achieve win-win situation. However, the business objectives of one member in the supply chain are not consistent with other members', and competition always exists. At this point, how to introduce contracts to supply chain, to coordinate the relationship among the members, making mutual benefit, seems particularly important.Based on the supply chain which contains only one manufacturer and one retailer, this dissertation builds a supply chain model, which includes one manufacturer and two retailers, then introducing two types of contracts to the retailers. It shows that the contracts can coordinate the supply chain, make the members of the supply chain get more benefits. Meanwhile, the contracts can compare the differences between the performances of the two contracts.Supply chain system carries the characters of dynamic, complex, multi-objective and non-linear, so it is hard to describe and study using the theory and methods of ordinary linear system. System dynamics (SD) is based on system theory,according to the causality relationship of system to form a dynamic model that can reflect non-linear, multi-feedback and long time delay and with the help of computer to simulate the transformation of the dynamic system so as to analyze the influence of the decision factors. So simulating the supply chain system with SD, can reflect the structure of the supply chain more directly, the results would be in line with the practice.Firstly, the dissertation summarizes the basic theory of supply chain management, contract and system dynamics, according to the character of SD, the feasibility and superiority of study contracts with SD is deduced. Secondly, with the modeling platform of Vensim, according to the SD theory, build a supply chain system SD simulation model with one manufacture and two relaters. Then, introducing contracts to the built model, construct the supply chain simulation model based on SD and contracts theory, the introduction of contracts to two retailers are different. Finally, it simulates the constructed models. Through a comparative analysis of the results, it proves the validity of the models and explains the differences between the coordination effectiveness of different contracts.