Coordination analysis on application service supply chain based on the ASP model

The coordination problem between a network service provider (NSP) and an application service provider (ASP) is studied from the perspective of application service supply chain based on the ASP model. Since the demand in the application service market is often uncertain, the risks of ASP's over and undercapacity were considered in this article. We first analyze the decisions and performances of the centralized and decentralized application service supply chains that consist of a NSP and an ASP under uncertain application service demand, and then propose a method that introduces the risk sharing of ASP's over and under-capacity into the revenue sharing contract to coordinate such an application service supply chain. The results show that this method can coordinate the application service supply chain, make the supply chain achieve the optimal performance and improve the profits of the NSP and the ASP. Moreover, the method also has certain ability of dealing with market demand uncertainty.