Abstract Considering the demand complexity and high returns phenomenon in B2C operation, this paper mainly studies the optimal decisions and coordination mechanism between a manufacturer and a retailer. Based on two types of consumers’ scenarios, we discuss the decisions of supply chain for price-sensitive consumers and quality-sensitive consumers. The results show that whether consumers are sensitive to quality or price, there exists optimal product quality and optimal delivery time for the manufacturer and the retailer. Compared with price-sensitive consumers, company facing quality-sensitive consumers should pursue higher product quality to obtain optimal profits. In addition, the supply chain can achieve coordination only if the product quality reaches a certain requirement. Finally, we find the delivery time has an important influence on coordinating the supply chain. The numerical examples show that the supply chain is more easily coordinated when the delivery time is longer.
