Abstract: The paper investigates two-echelon supply chain consisting of one vendor and multiple customers,and establishes two different optimization methods based on the joint and independent decisions.The best production interval of the vendor and the order times of each customer are well estimated correspondingly.In order to make saving for all members in the supply chain,the subsidy is applied into the joint decision method.Numerical example and sensitivity analysis show that the joint decision using the subsidy is better than the independent decision because all members gain significant savings.

Key words: supply chain inventory, joint decision, independent decision, subsidy