Simulation Study on Dynamic Characteristics of VMI Supply Chain Inventory System Based on Multi-Agent System

Abstract

Supply chain integrates supplier, manufacturer, wholesaler, retailer and end user to a system by logistics, business flow, information flow and cash flow. The enterprises in supply chain system are horizontally integrated and formed a strategic cooperative partnership. The supply chain inventory system is a sub-system of supply chain system. The purpose of inventory management of supply chain is to establish an effective method for controlling inventory by means of cooperation and coordination of various parties related to supply chain. Design, control and effective operation of a system are based on our good grasp of the inherent law and characteristics of the system through the analysis and study of it. To analyze and study a system, first a model of the system should be set up, which is called modeling. The model is an abstract, intrinsic and simplified description of the real system. In a sense, the process of scientific research is the process of setting up a model of real world. Usually, there are three approaches to the analysis and study of a system: analytic method, experimental (test) method, and modeling and simulation method. Analytic method needs to set up a mathematical model of the system, which means firstly equations of the system such as algebraic equation, ordinary differential equation, partial differential equation, difference equation or statistics equation are set up through identifying parameters of the system, and then analytical solutions are obtained by solving those equations. Analytic method is generally applicable to linear systems or some particular non-linear systems because it describes the behavior and characteristics of the system instead of real structure of the system. It is difficult to solve equations of complex non-linear system to obtain analytical solutions. Some systems are too complicated to set up their mathematical models. Therefore, the application of analytic method is limited. Experimental method needs to set up an entity model (or physical model) of the system because it is hard to conduct experiment directly with real system. The adoption of experimental method is comparatively time-consuming with high cost, and the implement is impractical and sometimes even impossible. Modeling and simulation method refers to a series of complex activities, such as setting up a model of real system and simulating on the computer. Modeling and simulation method is to simulate real system with a model. First a simulation model of real system is set up, then