Combining qualitative analysis and quantitative study on system dynamics,this paper first analyzes and defines the mode of the third party cross-docking supply hub in supply chain inventory management. Second,this paper sets up a system dynamics model in the supply chain based on the third party cross-docking supply hub mode. Finally,the simulation analysis of inventory management cases is made in order to prove that the third party cross-docking supply hub mode has a comparative advantage over decentralized VMI mode.What’s more,this paper offers optimization suggestions for the operation of this mode.