Simulation Research of the Retailer´s Ordering Strategy Based on System Dynamics

In supply chain, the ordering strategy is one of the main reasons leading to Bullwhip Effect which can induce inventory´s fluctuations or excessive inventory. In this paper, we set up a simulation model on the retailer´ s demand-driven supply chain by virtue of system dynamics, in which we compare the inventory´s behavior mode based on different ordering strategy, whose simulation results testify that the retailer´s ordering should include not only the inventory ordering, but also the pipeline order; on the other hand, making full use of real-time demand data utilizing information-sharing technology also can reduce the bullwhip effect and maintain the stability of stock.