Supply Chain Dynamics Under the Sustainable Development

Abstract

Supply chain dynamics is the key issues in supply chain management. To explain supply chain dynamics under the sustainable development, the paper will focus on its classic behavior: the inventory variance and bullwhip effect. A simple system dynamics model of an initial/closed loop supply chain system is investigated. Particularly, the effect of remanufacture, remanufacturing lead-time and the return rate on the inventory variance and bullwhip effect was studied. Our results clearly show that the bullwhip in closed loop supply chain is bigger than one in initial supply chain and have nothing to do with the collection rate, and the inventory variance in every stage decrease when the remanufacture are introduce into the initial supply chain. Furthermore, we find that the bullwhip effect in the closed loop supply chain will increase when the short term lead time of remanufacture cycle time increase and is independent of the long term lead time of remanufacture, inventory variance will increase in first two stages but will decrease for the producer stage.