Simulation of learning in supply partnerships

This paper introduces a general, formal treatment of dynamic constraints, i.e., constraints on the state changes that are allowed in a given state space. Such dynamic constraints can be seen as representations of "real world" constraints in a managerial context. The notions of transition, reversible and irreversible transition, and transition relation will be introduced. The link with Kripke models (for modal logics) is also made explicit. Several (subtle) examples of dynamic constraints will be given. Some important classes of dynamic constraints in a database context will be identified, e.g. various forms of cumulativity, non-decreasing values, constraints on initial and final values, life cycles, changing life cycles, and transition and constant dependencies. Several properties of these dependencies will be treated. For instance, it turns out that functional dependencies can be considered as "degenerated" transition dependencies. Also, the distinction between primary keys and alternate keys is reexamined, from a dynamic point of view.

The optimal length of contracts with application to outsourcing

This paper resolves three empirical puzzles in outsourcing by formalizing the adaptation cost of long-term performance contracts. Side-trading with a new partner alongside a long- term contract (to exploit an adaptation-requiring investment) is usually less effective than switching to the new partner when the contract expires. So long-term contracts that prevent holdup of specific investments may induce holdup of adaptation investments. Contract length therefore trades of specific and adaptation investments. Length should increase with the importance and specificity of self-investments, and decrease with the importance of adaptation investments for which side-trading is ineffective. My general model also shows how optimal length falls with cross-investments and wasteful investments.Contract length, market forces, incomplete contracts, holdup

Electronic Part Total Cost Of Ownership And Sourcing Decisions For Long Life Cycle Products

The manufacture and support of long life cycle products rely on the availability of suitable parts from competent suppliers which, over long periods of time, leaves parts susceptible to a number of possible long-term supply chain disruptions. Potential supply chain failures can be supplier-related (e.g., bankruptcy, changes in manufacturing process, non-compliance), parts-related (e.g., obsolescence, reliability, design changes), logistical (e.g., transportation mishaps, natural disasters, accidental occurrences) and political/legislative (e.g., trade regulations, embargo, national conflict). Solutions to mitigating the risk of supply chain failure include the strategic formulation of suitable part sourcing strategies. Sourcing strategies refer to the selection of a set of suppliers from which to purchase parts; sourcing strategies include sole, single, dual, second and multi-sourcing. Utilizing various sourcing strategies offer one way of offsetting or avoiding the risk of part unavailability (and its associated penalties) as well as possible benefits from competitive pricing. Although supply chain risks and sourcing strategies have been extensively studied for high-volume, short life cycle products, the applicability of existing work to long life cycle products is unknown. Existing methods used to study part sourcing decisions in high-volume consumer oriented applications are procurement-centric where cost tradeoffs on the part level focus on part pricing, negotiation practices and purchase volumes. These studies are commonplace for strategic part management for short life cycle products; however, conventional procurement approaches offer only a limited view for parts used in long life cycle products. Procurement-driven decision making provides little to no insight into the accumulation of life cycle cost (attributed to the adoption, use and support of the part), which can be significantly larger than procurement costs in long life cycle products. This dissertation defines the sourcing constraints imposed by the shortage of suppliers as a part becomes obsolete or is subject to other long-term supply chain disruptions. A life cycle approach is presented to compare the total cost of ownership of introducing and supporting a set of suppliers, for electronic parts in long life cycle products, against the benefit of reduced long-term supply chain disruption risk. The estimation of risk combines the likelihood or probability of long-term supply chain disruptions (throughout the part's procurement and support life within an OEM's product portfolio) with the consequence of the disruption (impact on the part's total cost of ownership) to determine the "expected cost" associated with a particular sourcing strategy. This dissertation focuses on comparing sourcing strategies used in long life cycle systems and provides application-specific insight into the cost benefits of sourcing strategies towards proactively mitigating DMSMS type part obsolescence

A decision-making approach for investigating the potential effects of near sourcing on supply chain

Purpose - Near sourcing is starting to be regarded as a valid alternative to global sourcing in order to leverage supply chain (SC) responsiveness and economic efficiency. The present work proposes a decision-making approach developed in collaboration with a leading Italian retailer that was willing to turn the global store furniture procurement process into near sourcing. Design/methodology/approach - Action research is employed. The limitations of the traditional SC organisation and purchasing process of the company are first identified. On such basis, an inventory management model is applied to run spreadsheet estimates where different purchasing and SC management strategies are adopted to determine the solution providing the lowest cost performance. Finally, a risk analysis of the selected best SC arrangement is conducted and results are discussed. Findings - Switching from East Asian suppliers to continental vendors enables a SC reengineering that increases flexibility and responsiveness to demand uncertainty which, together with decreased transportation costs, assures economic viability, thus proving the benefits of near sourcing. Research limitations/implications - The decision-making framework provides a methodological roadmap to address the comparison between near and global sourcing policies and to calculate the savings of the former against the latter. The approach could include additional organisational aspects and cost categories impacting on near sourcing and could be adapted to investigate different products, services, and business sectors. Originality/value - The work provides SC researchers and practitioners with a structured approach for understanding what drives companies to adopt near sourcing and for quantitatively assessing its advantage

The long term evolution of vertically-related industries

The paper develops the argument that the long-term structural evolution of an industry depends on the evolution of a vertically-related, downstream industry. We analyse two pairs of vertically-related industries, the jet and turboprop aircraft and engine industries, since the first introduction of the jet and turboprop technologies to 1998. The paper shows that the evolutionary dynamics of the downstream industry, in terms of number of firms and products, entry, exit and concentration, is transmitted to the upstream industry via the structure of the network of vertical exchange relations. We identify two network configurations, partitioned and hierarchical, and show that they are responsible for sharply different transmission effects. An econometric analysis is carried out to demonstrate this difference in the turboprop and jet markets.vertically-related industries; network; industrial concentration; entry; exit.

Cost analysis for competitive major weapon systems procurement : further refinement and extension

This report tracks historical trends in regional migration and economic conditions and the link with Army recruiting patterns. Future projections of regional population, migration, and economic activity are also presented. A third area of analysis is the impact of foreign immigration on regional markets is analyzed. Finally, the likely impact of projected changes in regional recruiting markets on Army recruiting prospects are assessedsponsored by the Office of Naval Research under work order N0001 484WR35075http://archive.org/details/costanalysisforc00greesponsored by the Office of Naval Research under work order N0001 484WR35075N

“Supply Disruptions, Asymmetric Information, and a Dual Sourcing Option

We study a manufacturer's strategic use of a dual-sourcing option when facing suppliers who possess private information about their likelihood of experiencing a supply disruption. The manufacturer can diversify its supply by ordering from both suppliers, but we find that the cost of doing so is inflated under asymmetric information due to the suppliers' incentives to misrepresent their reliabilities. If the manufacturer instead sole-sources, competition between the suppliers curbs their informational rents. Therefore, asymmetric information pushes the manufacturer away from diversification and towards sole-sourcing. Surprisingly, the additional cost that asymmetric information imposes on diversification may cause the manufacturer to cease diversifying in reaction to uniformly eroding supply base reliability, while it would do just the opposite under symmetric information. Despite these trends away from diversification, the value of the dual-sourcing option should not be underestimated for manufacturers who are unsure of their suppliers' reliabilities - the dual-sourcing option is actually more valuable under asymmetric information than under symmetric information if the manufacturer's cost of replacing a unit lost due to a disruption is moderate. We also analyze the eect of codependence between supply disruptions, and find that a reduction in supplier codependence increases the manufacturer's value of information. Therefore, strategic actions to reduce codependence between supply disruptions should not be seen as a substitute for learning about the suppliers' reliabilities.http://deepblue.lib.umich.edu/bitstream/2027.42/61153/1/1116_Damian.pd