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Simulation studies for the operation process of supply chain are helpful to find the factors which the bullwhip effect was caused by, and the measures weaken the bullwhip effect. A simulation model, using control theory and MATLAB, was developed to describe a three-echelon supply chain inventory control system under asymmetric information. In the simulation model, a non-linear controller was used to simulate the (s, S) Strategy in the supply chain. The simulation results demonstrated the existence of bullwhip effect and the simulation model developed is valid. Some further simulation results show that distortion of demand information results in the bullwhip effect when the demand information is asymmetrical for each echelon on the supply chain, and a coordinate mechanism should be established to improve the efficiency of supply chain.