Supply Chain Revenue-Sharing Contract with Effort Degree Affecting Demands

Considering a two level supply chain consisting of a supplier and a retailer,which faces a stochastic demand influenced by retailer′s sales effort.Before the sales season,the retailer has to decide both the ordering quantity and the level of the sales promotion at the same time.The paper first analyzes the reason why the traditional revenue-sharing contract can′t coordinate the decentralized supply chain,then it provides a new contract which is a combined contract about sales cost sharing based on revenue-sharing and proves that the combine contract can coordinate the supply chain when the way of the sales effort effect is in product.