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Today technology innovation and fashion innovation are shortening the product life cycle, and result in demand uncertainty in supply chain. Under the environment of contact manufacturing (CM), a supply chain flexibility model is presented to describe in the relationship among capacity, lead time and inventory and the effective way to deal with demand uncertainty and mitigate the inventory risk through capacity flexibility and lead time flexibility. Under the policy on Order-up-to Level, an optimal order level is obtained to improve supply chain performance though optimizing the supply chain cost.