In order to discuss the bullwhip effect in the supply chain with several dealers, a four-level supply chain model is developed based on system dynamics. Through the use of dynamic simulation, the bullwhip effect was evaluated based on several factors such as return proportion, direct utilization proportion of recycling products and sales plan of each dealer. Experimental results show that a higher return proportion and a more direct utilization of recycled products can mitigate the bullwhip effect. Moreover, different sales plan of each dealer has various degrees of influence on the bullwhip effect.