Abstract: In a two-echelon non-instantaneous deteriorating items supply chain consisted of a single producer and a single retailer, the demand faced by the retailer depends on sales price and deteriorating time of the items. Non-instantaneous deteriorating items is selected which is widely existing in reality as the research object, and the time-varying demand function is constructed in accordance with the characteristics of consumer demand. The pricing and replenishment model of non-instantaneous deteriorating items supply chain under decentralized and centralized decision-making is established, and the equilibrium solutions of sales price and order quantity under two decision-making modes are obtained. By comparing the two decision modes, it is found that the sales price is lower and the order quantity and expected profit are higher under the centralized decision. Therefore, centralized decision-making is superior to decentralized decision-making from the point of view of supply chain system with non-instantaneous deteriorating items, and from the perspective of social welfare. In order to guarantee the expected profit and social welfare under centralized decision-making, the quantity discount contract is introduced to coordinate non-instantaneous deteriorating items supply chain, and the increment of expected profit after coordination is allocated with the help of the utility function of constant relative risk aversion and Nash's bargaining theory. A numerical example is given to demonstrate the process of solving the decision variables. The sensitivity analysis shows the influence on the decision variables caused by the variation of the characteristic parameters of the non-instantaneous deteriorating items.

Key words: supply chain coordination, non-instantaneous deteriorating item, quantity discount, profit distribution