Abstract:This paper considers a two-level service supply chain with a service provider and a support service provider. The
market demand is dependent on the effort level of the support service provider, and service capacity is dependent on effort
level of the service provider. A service supply chain model is proposed with a cost sharing on capacity enlarging effort. Two
Nash games are considered when these decisions are made simultaneously(simultaneous game) or sequentially(sequential
game). Study results show that the cost-sharing strategy can induce a higher profit for the supply chain. Through numerical
examples, the relationship of the optimal solutions and coordination parameters is analyzed, and the evidences of the effect
of supply chain coordination are provided.