Abstract: In this article,we study the problem of optimization of Production-inventory model of one manufacturer and one retailer,in which the manufacturer produces deterioration products and the retailer's demand is stock-dependent demand. Aiming at the problem of low efficiency of decentralized decision making,a quantity discount contract is established to make the manufacturer and retailer obtain the advantage of centralized decision in their independent decision-making. Products sales data from a cake shop was used to carry out? the application of the model;?the results showed that when the production cost was too high,the manufacturer took a loss; when the retail price was too low,the retailer reduced order quantities,thus making the manufacturer take a loss. The higher storing cost,the lower profit of the manufacturer and the retailer. When ordering cost or production cost increase,the profit of the manufacturer and the retailer shows opposite trend. Both sides of the manufacturer and the retailer were sensitive to the change of the scale parameter and shape parameter,but were more sensitive to the change of the shape parameter. With the increase of the rate of loss,the profit of the manufacturer and the retailer decreased. The quantity discount contract could coordinate the production-inventory system,because of different discourse power,the manufacturer still got most profit after coordination.