Abstract: The coordination is studied for a single manufacturing-retailing supply chain as a system with returns policy warranted. Based on the frame of Stackelberg game, a gaming model is developed for such a supply chain system to which the market demand is supposed to be a linear decreasing function of retail price. Then, a newsboy model is developed by analyzing the optimal decisions in view of both the cooperation and non-cooperation, as well as a gaming model to reflect how the randomly disturbed market demand affects the supply chain with the coordination involved. In such a way the optimal decisions are given taking account of either the non-cooperation under which both the manufacturer and retailer can maximizing their profits or the cooperation under which the system can obtain optimal profit. Analyzing the conditions for using returns policy, the effective range is given.