Abstract: Revenue sharing contract is an important tool to achieve supply chain coordination.In this paper,a model of revenue sharing contract is built which considered the end-consumer demand with price sensitivity.A newsvendor model with an endogenous retail price is used to analyze respectively the behavior of supplier and retailer who are constrained by the revenue sharing contract,that is to say,the calculation formula of retailer’s optimal behavior and the range of contract parameter Φ are achieved in this paper.In the end,a numerical example is given to verify that revenue sharing contract can coordinate the supply chain.

Key words: supply chain, price-sensitive demand, revenue sharing contract, coordination