Abstract: The performance of a supply chain (SC) consisting of a monopolistic manufacturer and two competing retailers has been analyzed under a credit-period promotional-effort dependent demand. The trade credit made by the manufacturer and the promotional efforts offered by the competing retailers. Through the establishment of three kinds of decentralized decision-making models (Nash, Collusion and Stackelberg) and centralized decision models of supply chain between two retailers, the performance of supply chain members and the whole channel is analyzed, and the optimal value of trade credit and promotion efforts derived. On this basis, competition and coordination of supply chain members are considered, by balancing individual interests of the supply chain members and the interests of the whole channel, and then coordination contract parameters and conditions of the channel determined. Finally, through a numerical example and sensitivity analysis, the models are verified and compared. The results show the coordination mechanism can improve the profit of the whole supply chain, and guarantee the participation of all members of the supply chain, realizing the supply chain channel coordination.

Key words: monopolistic manufacturer, duopolistic retailers, trade credit, promotional efforts, competition and coordination