When the manufacturer’s production capacity is limited, the unit production cost will increase with the increasing
outputs. And with the increasing of order quantities, the retailer will do his best to meet sales targets, so the sale cost
will increase. Under these conditions, the revenue sharing contract can not coordinate supply chain perfectly. Therefore,
the contact model is modified, it is found that the manufacturer will increase the wholesale price with the unit product
manufacturing cost increasing, but it will shares with the retailer the sale cost initiatively, and the relationship between the
sharing ratio and the proportion of the retailer’s revenue is positive correlation. Under this circumstance, the supply chain
can be coordinated perfectly. Finally, a numerical example verifies the conclusions.