Abstract
This study investigates the supply chain management strategies for innovative products. The dynamic system of a supply chain consists of three subsystems: new product development, production, and retailing. We model and analyze supply chain strategies and policy combinations for innovative products of a case company using system dynamic model in this study. According to the outcomes of simulations and statistical analysis, we found that two variables, margin offered to retailers and retailers’ aggressiveness, have significant impacts on the total net profit. We further discover that the total net profit is always the largest when the margin offered to retailers equals 0.4. In terms of information delay, this study identified that the information system plays a more important role in a tough business environment than in a blooming one. This study also identifies that there is no significant interactive effects between the margin offered and the attractiveness of products. In addition, when the margin offered equals 0.2, longer QC cycle time will bring more total net profit than those scenarios with shorter QC cycle time. This study highlights the importance of the support of the system dynamic model on managerial strategic decision-making. We expect the simulation results will improve our understandings of factors that are crucial to supply chain management strategies for innovative products.