Abstract:In order to reduce the mismatch between supply and demand, this paper builds a threestage production and ordering mode to discuss supply chain coordination mechanisms with options. At the first stage, the retailer makes decisions on fixed order, and then at the second stage, which begins with demand forecast updating, the retailer makes adjustment to it and buy some options at the meanwhile. In the third stage, the demand will be realized; if there is shortage, it will be satisfied first through exercising option contract and second by invoking an urgent order but with delivery postponed. The option contracts consist of an option price, an exercise price, and a wholesale price under postponed shortage delivery, and the three are linearly correlated; the manufacturer has no motive to speculate under the option contracts. We take perishable commodities as an example to simulate the productionordering mode with option contracts, and find that the profits of the system and the two members have got Pareto improvement under the contracts and the proportions of extra system profit between them varies with the option price.