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An Experimental Investigation Of Outsourcing Through Competition, Ehsan Elahi, Roger Blake
An Experimental Investigation Of Outsourcing Through Competition, Ehsan Elahi, Roger Blake
Ehsan Elahi
Our research uses laboratory experiments to examine the theoretical results of competition between suppliers in an outsourcing setup. We consider a supply chain in which a single buyer needs to outsource the manufacturing of a product among N potential suppliers. The buyer allocates demand to suppliers not on the basis of price, but rather on service. We analyze the levels of service suppliers will decide to provide when competing on three different criteria specified by the buyer. For the first, suppliers compete by providing the buyer a specific service level (fill-rate), and for the second by maintaining a specific quantity …
Product Bundling: Impacts Of Product Heterogeneity And Risk Considerations, Mehdi Sheikhzadeh, Ehsan Elahi
Product Bundling: Impacts Of Product Heterogeneity And Risk Considerations, Mehdi Sheikhzadeh, Ehsan Elahi
Ehsan Elahi
Bundling has been extensively studied in the literature and its benefits have been manifested through three perspectives of achieving better price discrimination, helping to save costs, and preserving the power for deterring a potential entrant. In this study, we examine two aspects of bundling which have not been studied before. We examine the impact of product heterogeneity on bundling decisions. We also address risk considerations in a bundling problem. Specifically, we consider a retailer who has the option of selling a bundle of two products (pure bundling policy), or selling the products separately (no-bundling policy). The retailer could also face …
Optimal Service-Based Competition With Heterogeneous Suppliers, Ehsan Elahi, Saif Benjaafar, Karen L. Donohue
Optimal Service-Based Competition With Heterogeneous Suppliers, Ehsan Elahi, Saif Benjaafar, Karen L. Donohue
Ehsan Elahi
We investigate how a competition can be designed to maximize expected profit for a buyer who wishes to allocate demand among a diverse set of suppliers when his profit is dependent on the supplier’s service levels. The candidate suppliers are heterogeneous in their capacities and cost structures, and compete for shares of the buyer’s demand based on their promised service levels. To characterize the optimal competition, we first identify a family of allocation functions that are service maximizing, meaning they can intensify the competition to a point where each supplier provides its maximum feasible service level and the outcome of …
Outsourcing Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Outsourcing Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Ehsan Elahi
We consider a single buyer who wishes to outsource a fixed demand for a manufactured good or service at a fixed price to a set of potential suppliers. We examine the value of competition as a mechanism for the buyer to elicit service quality from the suppliers. We compare two approaches the buyer could use to orchestrate this competition: (1) a Supplier-Allocation (SA) approach, which allocates a proportion of demand to each supplier with the proportion allocated to a supplier increasing in the quality of service the supplier promises to offer, and (2) a Supplier-Selection (SS) approach, which allocates all …