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Procurement Costs (procurement + cost)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	60%

Selected Abstracts

JOINT BIDDING, GOVERNANCE AND PUBLIC PROCUREMENT COSTS:A CASE OF ROAD PROJECTS,

ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 3 2009
Antonio Estache
ABSTRACT§:,To utilize public resources efficiently, it is important to take advantage of competition in public procurement auctions to the maximum extent. Joint bidding is a common practice that potentially facilitates competition. By pooling financial and experiential resources, more firms are expected to enter the market, but it will also directly reduce competition if more than one bidder who is solely qualified makes a coalition. In theory joint bidding may or may not be beneficial to auctioneers, depending on the model. The paper empirically examines the impacts of joint bidding on firms' entry as well as bidding behaviour, using data on public road projects in developing countries. It shows that coalitional bids, in particular by local firms, would be competitive, but foreign joint ventures would undermine competition. It is also found that good governance can encourage firms' entry into the tendering and facilitate joint bidding practices. [source]

Competition under time-varying demands and dynamic lot sizing costs

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 1 2009
Awi Federgruen
Abstract We develop a competitive pricing model which combines the complexity of time-varying demand and cost functions and that of scale economies arising from dynamic lot sizing costs. Each firm can replenish inventory in each of the T periods into which the planning horizon is partitioned. Fixed as well as variable procurement costs are incurred for each procurement order, along with inventory carrying costs. Each firm adopts, at the beginning of the planning horizon, a (single) price to be employed throughout the horizon. On the basis of each period's system of demand equations, these prices determine a time series of demands for each firm, which needs to service them with an optimal corresponding dynamic lot sizing plan. We establish the existence of a price equilibrium and associated optimal dynamic lotsizing plans, under mild conditions. We also design efficient procedures to compute the equilibrium prices and dynamic lotsizing plans.© 2008 Wiley Periodicals, Inc. Naval Research Logistics 2009 [source]

A Bayesian analysis on the effect of multiple supply options in a quick response environment

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 8 2003
Hag-Soo Kim
Abstract In the apparel industry, vendors often suffer from high mismatches in supply and demand. To cope with this problem, they procure the same style product from different suppliers with different manufacturing costs. Especially in the quick response environment, which allows vendors to monitor trends in customer demand and search for available suppliers through the electronic market, they have additional opportunities to improve their decision-making. In this paper, we propose an analytical profit maximization model and develop efficient decision tools to help both the middle and lower level managers pursuing this strategy. Furthermore, we have shown how significantly the vendors' potential competitive edge can be improved by exploiting multiple supply options, even at the expense of high premium procurement costs for late orders. The effect is critical, especially in a highly competitive market, and it has important implications for the top managers. © 2003 Wiley Periodicals, Inc. Naval Research Logistics, 2003 [source]

CUT-THROAT FRINGE COMPETITION IN AN EMERGING COUNTRY MARKET: TAX EVASION OR THE ABSENCE OF MARKET POWER?,

THE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 4 2009
ALBERTO SALVO
Brazil's established soft-drink firms recently lost ground to multiple low-price entrants, with small-scale operations and minimal advertising. While incumbents attributed such undercutting to entrants' lower costs from non-compliance with the law, ,generics' counterargued that incumbents' high prices stemmed from unilateral market power rather than cost heterogeneity. By estimating a structural model, I can single-handedly explain established brands' high prices through low equilibrium price elasticities of demand. Tax evasion in the fringe, while plausible, appears to be offset by higher procurement costs or less efficient scale. More generally, a competitive informal sector can alleviate the allocative distortions in certain concentrated industries. [source]

DOES DUAL SOURCING LOWER PROCUREMENT COSTS?,

THE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 2 2006
THOMAS P. LYON
U.S. defense policy encourages the use of dual sourcing to reduce government procurement costs, but recent theoretical work raises doubts about the benefits of this policy. I study the determinants of dual sourcing and its effects on government procurement costs using a panel dataset of tactical missiles. I find dual sourcing is not driven by failures to reduce costs; instead, it is used more often after incumbent suppliers demonstrate quality control problems, and in settings where tacit collusion is likely to be difficult. After correcting for selection bias, dual sourcing is found to reduce government procurement costs significantly. [source]