Faced with new challenges in managing the cyclical and volatile business environment, management at a Commodity Plastic (COM-P) Company agreed to apply System Dynamics (SD) to support strategy development. A SD model of COM-P industry was built by adapting the Pulp and Paper Model. The structure of COM-P Index Price creation was mapped and added to the generic model. The following were investigated: a) The effect of current delays in adjusting prices on phantom demand, on capacity utilization and shipment rates; b) The phenomenon of Phantom demand or pre-buying when customers perceive that prices may be about to go up was modeled; c) By applying the model, the amount of margin lost or gained by the industry due to the price protection terms in the contracts was estimated; d) The risk in the top ten long term contracts under different supply and demand conditions and oil prices in order to support the sales organization with their negotiations; e) The model was applied to get guidance on capital investment timing and to assess the effect of different oil prices and supply & demand scenarios on the profitability of new investments. In many cases the results were counter-intuitive.