Research and Simulation of Supply Chain Disruption Based on Contract

Abstract

In order to research the long-term disruption influence on supply chain and the performance that contracts exert on supply chain when disruption happens, this paper constructs a VMI three-echelon supply chain model based on system dynamics. Through dynamic simulation of the model, the total inventory, total profit and market demand shortage data are respectively collected under conditions of no disruption, manufacture disruption and transport disruption. By descriptive statistical analysis of these data, we find the disruption has secular and hysteretic effect on the supply chain. Furthermore, T test is used to testify the contracts effectiveness on the supply chain under disruption conditions. These analytical results show that quantity discount contract and revenue sharing contract can effectively relieve the negative influence on the supply chain when disruptions happen, since they not only enhance the total profit but also stabilize the fluctuation of the supply chains total inventory, whereas the contracts do not perform well in satisfying the market demand shortage.