This research proposes a two-layered supply chain model consisting of a set of clients and suppliers for dynamic supply chain management considering production and transportation scheduling problems. The model provides a method to optimize both production schedules and transportation schedules simultaneously, in order to estimate suitable prices and delivery times of products. A prototype of simulation system for dynamic supply chain management was developed and some computational experiments were carried out in order to verify the effectiveness of the model. Experimental results show that the prototype system is available to determine suitable production schedules and transportation schedules from the viewpoint of the number of contracted orders and the cost for wasteful shipping. copy; 2010 IEEE.