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31
Simulation Study on Dynamic Characteristics
of VMI Supply Chain Inventory System
Based on Multi-Agent System
Wang Jirong
1
, Li Jun
1
and Li Qianying
2
1
Qingdao University, Qingdao
2
Beijing Normal University, Beijing
China
1. Introduction
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.