Abstract: Defines the supply chain network system as at three levels, i.e., supplier, manufacturer and retailer, and takes the costs for the capacities of supply, manufacture and transport of the three levels as a target function to minimize the costs. As a result, a strategic capacity planning model for supply chain is developed to respond rapidly to the dynamic changes of market at minimal cost. Using heuristic algorithm to find out a feasible solution as an upper limit of branch-and-bound algorithm, an optimal solution is got iteratively. A numerical example demonstrates that the implement of strategic capacity planning in an enterprise as a node of supply chain can optimize the utilization rate of its resource and reduce its inventory to the utmost extent, as well as the maturity of the optimization objective and the validity of the model and algorithm.