We study capacity reservation contracts in high-tech manufacturing, where the manufacturer (the supplier) shares the risk of capacity expansion with her OEM customer (the buyer). We focus on shortlife-cycle, make-to-order products under stochastic demand. The supplier and the buyer are partners who enter a "design-win" agreement to develop the product, and who share demand information. The supp...

Functional relationship between supplier and buyer in an open market place leads to investigate the role of both quantifiable and non-quantifiable parameters in coordination mechanism with the aim of achieving higher performance in supply chain activities. Here, we develop a supply chain model and a new agent to analyze and simulate the players’ behavior in the network. A cooperative game theor...

The outsourcing of Information Technology (IT) services is a practice generally regulated by contracts. Since contracts are inevitably incomplete, buyer-supplier relationships are usually managed by additional mechanisms of incentives and governance, which results in a variety of success levels. Buyer perceived volatility and ambiguity of the future relationship are argued to be keys in definin...

The literature offers little empiric evidence on the role of management accounting in inter-firm relationships. So, in the following research, we examined the effect of the use of a set of new management accounting practices namely the ABC, the balanced scorecard and the financial and accounting benchmarking as well as the effect of the investment in information and communication technologies (...

We study the decision of a manufacturer (buyer), expecting new sourcing opportunities in the future, to select between a sole and a second sourcing mechanism for a non-commodity component. In a sole sourcing mechanism, the buyer commits to source from the current supplier. In a second sourcing mechanism, the buyer keeps the option open to source from a new supplier in the future. For a buyer th...

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...

We consider the order fulfillment process of a supplier producing a customized capital good, such as production equipment, commercial aircraft, medical devices, or defense systems. As common in these industries, prior to receiving a firm purchase order from the customer, the supplier receives a series of shared forecasts, which are called ‘soft orders’. Facing a stochastic internal manufacturin...

This paper examines the relationships between supplier development efforts and buyer competitive advantage from the buyer’s perspective, and seeks to understand how specific supplier development efforts may impact on a buyer’s operational performance. We conducted a survey of 142 electronics manufacturing companies in Hong Kong, and applied structural equation modeling (SEM) to test a structura...

We consider a stochastic inventory control problem in which a buyer makes procurement decisions while facing periodic random demand and two supply sources, namely, a long-term contract supplier and a spot market. The contract between the buyer and the supplier partially shields the latter from the vicissitudes of the spot market, in that the price paid by the buyer to the supplier is only parti...