System Dynamic Simulation Approach for Supply Chain with Capability Limit

Abstract

Supply chain simulation is always an important subject in recent years. According to the deficiency of simulation research on the capability limit, this paper simulates supply chain through system dynamics method in order to bring forward some valuable viewpoints.  Firstly, the capability limit can have great influence on the operation of supply chain. Secondly, the effects caused by the capability limit may disappear when the threshold arrives. Thirdly, some profits maybe be produced with the improvement of the capability limit under the threshold, such as transporting ability limit, and as a difficult problem, the exact value can be gained through that simulation method. Fourthly, the whole supply chain may be affected by the capability limit, sometimes, an investment carried on by an enterprise for the others maybe brings out great profit to itself, and the wise decision can be made.