Abstract: This paper analyzes the pricing and capacity planning coordination problem in supply chains with uncertain and price-dependent demand.The manufacturer purchases a kind of key component from the supplier and manufactures the final product.The potential demand for the product is a random variable, and the final demandfor the product is determined by the selling price.The manufacturer can purchase the key component from other sources with a higher price if the supplier's capacity is constrained.The selling price and capacity are respectively determined by the manufacturer and the supplier.We analyze and compare the strategies made in centralized and decentralized supply chains.We design a kind of reimbursement contract to effectively coordinate the decision behaviors of the manufacturer and the supplier.Finally,numerical examples are presented to show the effectiveness of the contract.

Key words: reimbursement contract, supply chain coordination, capacity planning, product pricing