Because of the inherent complexity of decision making in supply chains, there is a growing need for modeling supply chain system with different methodologies. A large number of manufacturing like soft drinks industry and service organizations are therefore seeking modeling systems that can help, identify and implement strategies for designing and improving their supply chain networks. Developing a supply chain management system requires the analysis of the flow of materials from the initial sourcing to the final end customers. Increased recognition is being placed, both in industry and in academia, on effective supply chain management. The term supply chain management (SCM) presupposes that there exists a supply chain to be managed. SCM has become a universal approach to cost effectiveness, timely delivery and the creation of growth oriented exchange system in goods and services. With a focus on SCM in which cost, inventory and time are the key challenges, this thesis develops a model to aid the improvement of performance of supply chain system.