This paper argues the operation and coordination of supply chain under delay in payment with a loss-averse
retailer. It is indicated that the Nash equilibrium exists in decentralized decision, the loss-averse retailer is likely aggressive
in ordering, the order quantity is decreases with respect to the retailer’s increasing loss-aversion, the wholesale price is
increasing with respect to the retailer’s increasing loss-aversion, and the supplier is apt to choose the retailer with less loss-
aversion in order to improve performance. The buy-back contract that can be proved flexible maintains the coordination of
supply chain under this setting.