In the supplier-dominated and decentralized supply chain,the decisions of the retailer’s lot size and the supplier’s lead time and wholesale price were discussed in the context of lead time compression and demand forecast updating.Besides,the interaction between the retailer and supplier,the impact of lead time compression cost on retailer and supplier’s decisions were analyzed.The research shows that the retailer’s optimal ordering quantity is low at equilibrium,resulting in the service level of less than 50%and long lead time;motivating retailer to increase lot size is the key to improving service level and reducing lead times;reducing lead time compression cost can both enable retailers to increase lot size and increase the supply chain’s service level.It also enables the supplier to reduce lead time and improve the response speed of the supply chain to market demand.