Highlights A game theoretic model is used to design an outsourcing contract for a buyer and a supplier under Full Information case and Asymmetric Information. Focus on discussing the outsourcing risks management caused by Asymmetric Information in the contract design. Identify the conditions when the supplier and the buyer prefer Full Information case and Asymmetric Information case and also situations when the buyer wants to switch Asymmetric Information into Full Information game.
Abstract Cost, quality and time to market are three main factors for outsourcing management. A game theoretic model is used to design optimal outsourcing contracts including these three factors for a buyer and a supplier under Full Information (F) case and Asymmetric Information (A) case where the buyer does not share her internal variable cost information with the supplier. Optimal outsourcing contracts are derived and results of numerical experiment are also presented. Several insights of managing the outsourcing risks due to the Asymmetric Information are given for various industries, like cost-sensitive industry, time-sensitive industry, and quality-sensitive industry.
Managing the risks of outsourcing: Time, quality and correlated costs
2015-06-11
13 pages
Aufsatz (Zeitschrift)
Elektronische Ressource
Englisch
Managing the risks of outsourcing: Time, quality and correlated costs
Online Contents | 2016
|Management the risks of outsourcing: Time, quality and correlated costs
Online Contents | 2015
|Outsourcing Managing offshore outsourcing contracts
British Library Online Contents | 2003
Outsourcing Outsourcing cuts costs for Royal Mail
British Library Online Contents | 2003
Data losses expose risks inherent in outsourcing
British Library Online Contents | 2008