Research on the supplier strategy under VMI based on system dynamics

Firstly, this paper combines the principles of inventory management under VMI and characteristics of the system dynamics in decision making the research on the supplier strategy under VMI suitability and superiority. Secondly, according to the demand of real system and the requirements of system dynamics models, we delimit the boundary of this model. Furthermore, based on the clear system boundary, a kind of simulation software named “Vensim” is proposed to construct the simulation models of Service Level and Cost Evaluation in the suppliers perspective under VMI. At last, several suggestions are given to improve the performance of supply chain according to the results of simulation.