This paper presents a new negotiation mechanism and a new supplier model for Trading Agent Competition Supply Chain Management(TAC SCM). Under the new negotiation mechanism, an agent is allowed to negotiate with component suppliers on price, delivery date and supply quantity while a supplier can autonomously vary its production capacity with market demands and allocate its products to buyers through auction. A mathematical analysis is given to ensure the new negotiation mechanism and supplier model effectively solve the existing problems while keeping most good features of the original TAC SCM game model. Categories and Subject Descriptors I.6.5 [SIMULATION AND MODELING]: Model Development General Terms Algorithms, Design, Experimentation Keywords negotiation, trading agent, multi-agent simulation and modelling