Theoretical Analysis of Dynamic Effects of Supply Chain Concentration on Inventory Management Performance: A System Dynamics Approach
Year: 2025
Type: article
Abstract: Amid global supply chain volatility, inventory management performance (IMP) is vital to manufacturing competitiveness. Supply chain concentration (SCC), including supplier concentration (SC) and customer concentration (CC), has emerged as a key structural factor influencing IMP, yet its dynamic effects remain unclear. This study develops an original system dynamics (SD) model to analyze how SC and CC affect IMP under linear and random demand patterns. The model incorporates in-transit stock, work-in-process and inventory levels as key state variables, with SC and CC as exogenous inputs. Using Vensim PLE 7.3.5, simulation and sensitivity analyses were conducted and validated with ten years of operational data from two Chinese listed manufacturing enterprises. The results show that SC exerts an inverted U-shaped effect on IMP, with an optimal threshold near 50%. CC displays a U-shaped impact under a linear demand but an unstable influence under a random demand and contributes less significantly than SC. The findings suggest that enterprises should adjust SC toward 50% and manage CC flexibly according to demand patterns, prioritizing SC optimization. These findings provide both theoretical insights and managerial implications for the dynamic regulation of supplier–customer relationships and optimization of supply chain structures.
Source: Systems
Authors: Xiaoyue Zhang, Meiling Liu, Xuke Zheng, Shan Gao
Institutions: Northeast Forestry University, BYD (China)
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,896
Award: G4345219249
OpenAlex ID: W4416903437