Abstract:  The traditional buy-back contract, quantity discount contract and profit sharing contract can solve the problem of mismatch between vendors ordering quantity and the actual demand, but they produce new incentive failure. Introduction of the cooperation promotion, combined with other coordination mechanism, can effectively improve the level of optimization of supply chain coordination. With the cost sharing as the object, adopting the asymmetric Nash negotiation model with retailer promotional effort, a supply chain coordination contract is designed, thus making up the residual income data which are difficult to obtain and ignore the negotiation ability factors causing defects in optimal reward contract design.

Key words:  promotional cost, supply chain coordination, sharing proportion, Nash negotiation