OUTSOURCING

Supply Chain: Outsourcing

Supply Chain: Outsourcing

Risks associated with the use of the market

There is a conflict of interest between both parties and asymmetric information. The customer seeking ever the same price or lower prices, the provider, reassured by a signed contract, will not make every effort to reduce costs, or if it reduces, it will not adjust the sale price accordingly. This risk gets limited so creates a partnership relationship: it is essential that the provider to make the necessary investments in equipment, research training and development, logistics (Domberger, 1998).

Risk associated with the waiver contracts

Another problem concerns the outsourcing ...