Valuate Outsourcing Contracts from Vendors' Perspective; A Real Options Approach


Bin Jiang
  • Speaker
College of Commerce, DePaul University, Chicago

Event Information

Type
Research Seminar
Programme
Logistics
Date
Mon. 18 Aug. 2008
Contact
Time
12:00-13:00 hours
E-mail
Location
Mandeville Building T10-67
Number


Abstract

To date, most applications of real options theory in the literature of outsourcing are modeled from the clients’ side. Little attention has been paid to vendors’ options in outsourcing. In this paper, we study outsourcing from the vendors’ perspective by analyzing vendors’ value of waiting. The contribution of our research to the literature lies in our analysis of a model that compensates for vendors’ loss of option to wait in that they have to exercise outsourcing contracts at clients’ given timing. Such a compensation-oriented model yields new insights about vendors’ valuation of outsourcing opportunities, and offers important practical guidance to vendors’ decision-making. 
 
Contact information:
René de Koster
Email

René de Koster
Professor of Logistics and Operations Management
  • Coordinator