The Application Of System Dynamics In Supply Chain Modeling

System dynamics(SD)was created by Professor Forrester, MIT USA. It researches and deals with questions by feedback loop. It pays more attention to the relationship between each factor inside the question. It is often used to deal with the non-linear questions with high level of order and multiplicity loop. It designs simulation models by differential equation. It can simulate non-linear complex dynamic systems with thousands of variables and high level differential equations by computer. The supply chain can be researched by system dynamics, including every factors inside the supply chain, because of its own character.Many factors are included in a supply chain. The thesis mainly researches three factors inside the supply chain by SD, which are facility allocation, inventory and bullwhip effect.Traditional algorithms get the results directly without detailed sensitivity analysis and charts. So SD is introduced to research facility allocation. Single facility allocation research is followed by multi-facility allocation research, and both carriage and production count are considered. Some conclusions and sensitivity analysis are come to by stepwise in-depth analysis and comparison.Traditional algorithms don't combine inventory with production and sale, and don't reveal detailed inventory change either. So inventory is researched by SD here. The thesis first discusses ideal inventory modeling. Considering delay, then the thesis researches inventory principle, mathematics graph, concussion principle.Most papers only introduce bullwhip effect theory, a few researches the principle, and few adopts SD. This paper first researches bullwhip effect under extreme condition. Then the paper comes to some conclusions by adjusting parameters to reduce bullwhip effect.