Study On The Simulation Of Two-tier Supply Chain Inventory Control Based On System Dynamics

With the globalization of market and economy, the management philosophy based on individual enterprise can't win the competition any more. Therefore, the traditional management is changed and gradually substituted by the horizontal management model. SCM(Supply Chain Management) that based on the extended enterprise is the right typical new management model, which manages all enterprises in the supply chain properly in order to obtain the maximum benefit of the total supply chain. The appearance of SCM indicates a new development direction for the traditional inventory control. In recent years, inventory control system based on SCM shows obvious advantages in th aspects of reducing inventory cost and improving service level, which is becoming a hotspot not only in the research of the theory but also in the practice of the enterpriseFirst of all, the paper summarizes the basic theories of supply chain management, inventory management and system dynamics, and according to the characteristics of system dynamics, the feasibility and superiority of study supply chain management by the way of system dynamics is deduced. Then, according to the theory of system dynamics, the two-tier supply chain inventory control model is built on the platform of Vensim. After that, by taking the selling price of the manufacturer's products and the trade-off cost between the manufacturer and the retailer as decision-making variables we construct different strategis, and simulates the model to analyze the inventory stability and the profit of the supply chain.