Abstract: In most supply chain contract literatures,the customers' demand is often hypothesized as an independent and exogenous stochastic variable.But in factual conditions,it is often influenced by retailer's promotional effort.In this article,optimal promotional effort and order quantity of the integrated and non-cooperative modes are firstly analyzed under demand with promotional effort.Then a buy-back contract with effort sharing is founded to coordinate incentive discrepancy between supply chain members.Finally,an instance displays the different supply chain performance under the different strategies with no promotional effort and coordination,with promotional effort but no coordination,and with promotional effort and coordination.

Key words: supply chain coordination, supply chain contract, buy-back contract, promotional effort