Abstract: The impact of price-dependent demands on the production-distribution inventory system is studied. Three demand functions with price are applied: down trend linear function, nonlinear power function, and nonlinear exponential demand function. By using a SD (System Dynamics) simulation method, the bullwhip effects of three demand functions are compared. The results show that when the demand is a down trend linear function of price, the bullwhip effect is the largest, and the other two demand functions have the similar bullwhip effects. With the results obtained, it is beneficial for improving production and distribution strategies and upgrading the competition ability in the marketplace.