Supply　chain　dynamics　is　the　key　issues　in　supply　chain　management.　To　explain　supply　chain　dynamics　under　the　sustainable　development,　the　paper　will　focus　on　its　classic　behavior:　the　inventory　variance　and　bullwhip　effect.　A　simple　system　dynamics　model　of　an　initial/closed　loop　supply　chain　system　is　investigated.　Particularly,　the　effect　of　remanufacture,　remanufacturing　lead-time　and　the　return　rate　on　the　inventory　variance　and　bullwhip　effect　was　studied.　Our　results　clearly　show　that　the　bullwhip　in　closed　loop　supply　chain　is　bigger　than　one　in　initial　supply　chain　and　have　nothing　to　do　with　the　collection　rate,　and　the　inventory　variance　in　every　stage　decrease　when　the　remanufacture　are　introduce　into　the　initial　supply　chain.　Furthermore,　we　find　that　the　bullwhip　effect　in　the　closed　loop　supply　chain　will　increase　when　the　short　term　lead　time　of　remanufacture　cycle　time　increase　and　is　independent　of　the　long　term　lead　time　of　remanufacture,　inventory　variance　will　increase　in　first　two　stages　but　will　decrease　for　the　producer　stage.　©　2008　IEEE.