Inventory policies for supply chains a system dynamics model based study

A two player, Manufacturer - Retailer, System Dynamics (SD) model is used to understand the effect of various changes in inventory policies in meeting different objectives in supply chains. Depending upon the definition of the objective function policies could be specifically formulated to achieve them. While information visibility is a desirable feature to reduce the safety stock levels both at supplier and retailer facilities, maintenance of certain levels of safety stocks could definitely come in handy when there are unexpected disruptions in the production process or the transportation between supply chain partners.