Abstract:This paper considers the supply chain coordination problem based on quality control and loss aversion. The behavior of loss-averse manufacturers and loss-averse retailers is portrayed by the loss-averse utility. Then, the optimal strategies of the manufacturer and retailer are analyzed at the decentralized supply chain and centralized supply chain respectively. And a supply chain coordination contract model is constructed by combining the wholesale price contract and the quality cost sharing contract, and the study shows that the supply chain considering quality control and loss aversion can achieve coordination using the contract. Furthermore, under the decentralized and centralized supply chain, a numerical example is given to conduct sensitivity analysis on parameters of the proposed model, and the parameters include loss aversion, qualified rate of products, wholesale price and so on. Through the analysis, the relationship among loss-averse, quality control and optimal product quality, optimal order quality, supply chain utility can be revealed.