Investments under vertical relations and agency conflicts

We examine the case of an investment project that, i) is characterized by uncertainty and irreversibility, ii) is undertaken in a decentralized setting and iii) its completion is conditional on the provision of an input by an outside supplier with market power. Our findings suggest that, if compared to a case where the input is insourced, the vertical relation increases the investment cost. Nevertheless, the effect on the timing and the value of the investment is ambiguous since it depends on the information endowment of the involved parties. We discuss three levels of information sharing among the links of the supply chain and we identify the cost, the timing and the value of the option to invest for each one of them

Factors Affecting the Integration of E-Procurement in the Public Sector of Pakistan with an Emphasis on Combating Corruption

The aim of study to investigates the role of e-procurement technologies to mitigate corruption within the public procurement sector of Pakistan due to which E-procurement can’t be implemented. It examines the factors that contribute to corruption probability in government procurement process. The implementation of E-Procurement, within the public sector represents a significant transformation in the country's governance which serves as a strategic response to enhance transparency, accountability, and efficiency in public procurement processes. In the design of E-procurement adoption, three primary factors were taken into consideration to address obstacles: Monopoly power; Information asymmetry; Transparency and accountability. A survey was distributed to 232 procurement specialists and government suppliers; the approach chosen involves the distribution of a well-structured closed-ended questionnaire to enable quantitative assessment, utilizing a convenience sampling method. Obtained informed consent from participants that ensure participants understand the purpose, procedures, potential risks, and benefits of the research project and voluntarily agree to participate. The SPSS software was employed to compile the results of multiple regression models. The findings reveal a substantial 76.9% impact of various variables contributing to adaptation of E-procurement. The result indicates that all three-independent variable: Monopoly power, Information asymmetry, transparency & accountability are creating major resistance in implementation of E-procurement in the government organizations which are the major cause of corruption. This research provides valuable insights into enhancing the efficiency and effectiveness of resources within the public sector. As one of the few studies on this topic, it serves as a foundational piece of literature that can guide future research and policymaking endeavors in Pakistan's public procurement landscape. Ultimately, the successful implementation of E-Procurement has the potential to transform how public funds are managed, ensuring greater accountability, transparency, and efficiency in public sector operations.info:eu-repo/semantics/publishedVersio

Delegation vs. control of component procurement under asymmetric cost information and simple contracts

Due to copyright restrictions, the access to the full text of this article is only available via subscription.A manufacturer must choose whether to delegate component procurement to her tier 1 supplier or control it directly. Because of information asymmetry about suppliers’ production costs and the use of simple quantity discount or price-only contracts, either delegation or control can yield substantially higher expected profit for the manufacturer. Delegation tends to outperform control when (1) the manufacturer is uncertain about the tier 1 supplier’s cost and believes that it is likely to be high; (2) the manufacturer and the tier 1 supplier know the tier 2 supplier’s cost or at least that it will be high; (3) the manufacturer has an alternative to engaging the tier 1 and tier 2 suppliers, such as in-house production; and (4) the firms use price-only contracts as opposed to quantity discount contracts. These results shed light on practices observed in the electronics industry

Competitive Bidding in Supply Chains

This thesis is primarily concerned with the competition between suppliers for a buyer’s procurement business with consideration of subcontracting, commitment and capacity reservation. Under the circumstance where suppliers face diseconomies of scale, it may be cost effective for a buyer to split an order across different suppliers. Even when the buyer chooses only one supplier, the winning supplier may subcontract part of the work to the others subsequently. Motivated by these observations, Chapter 2 studies a supplier bidding game where a buyer requests quotes from two competing suppliers. We consider two procurement scenarios: (1) Order Splitting where each supplier submits a function bid which specifies different payments for different quantities, and the buyer may split the order; (2) Single-Sourcing Commitment where the buyer commits to purchasing from only one supplier before suppliers submit their bids, and the winning supplier may subsequently subcontract with the losing one. The second and third papers investigate the competitive behaviour of suppliers with capacity reservation. To hedge against financial risks, the suppliers often require a buyer to reserve capacity in advance by paying an upfront fee. In Chapter 3, we consider a discrete version of this problem where competing suppliers each choose a reservation price and an execution price for blocks of capacity, and the buyer needs to decide which blocks to reserve. Chapter 4 studies a continuous version of the problem where we allow general cost functions. The suppliers compete by offering the price functions (for reservation and execution) and the buyer decides how much to reserve from each supplier. This thesis sheds light on how suppliers compete with each other by considering a variety of factors. We believe an in-depth look at the competitive behaviour of suppliers will deepen our understanding of a buyer’s procurement process, and hence helps a buyer make a better sourcing decision

Competitive Bidding in Supply Chains

This thesis is primarily concerned with the competition between suppliers for a buyer’s procurement business with consideration of subcontracting, commitment and capacity reservation. Under the circumstance where suppliers face diseconomies of scale, it may be cost effective for a buyer to split an order across different suppliers. Even when the buyer chooses only one supplier, the winning supplier may subcontract part of the work to the others subsequently. Motivated by these observations, Chapter 2 studies a supplier bidding game where a buyer requests quotes from two competing suppliers. We consider two procurement scenarios: (1) Order Splitting where each supplier submits a function bid which specifies different payments for different quantities, and the buyer may split the order; (2) Single-Sourcing Commitment where the buyer commits to purchasing from only one supplier before suppliers submit their bids, and the winning supplier may subsequently subcontract with the losing one. The second and third papers investigate the competitive behaviour of suppliers with capacity reservation. To hedge against financial risks, the suppliers often require a buyer to reserve capacity in advance by paying an upfront fee. In Chapter 3, we consider a discrete version of this problem where competing suppliers each choose a reservation price and an execution price for blocks of capacity, and the buyer needs to decide which blocks to reserve. Chapter 4 studies a continuous version of the problem where we allow general cost functions. The suppliers compete by offering the price functions (for reservation and execution) and the buyer decides how much to reserve from each supplier. This thesis sheds light on how suppliers compete with each other by considering a variety of factors. We believe an in-depth look at the competitive behaviour of suppliers will deepen our understanding of a buyer’s procurement process, and hence helps a buyer make a better sourcing decision