A model for contract evaluation: subcontracting under dynamic deterministic demand environment

Özlen, Melih
This study is about contract evaluation and selection in an environment where there exist two or more parties, namely a producer and one or more outsourcing companies offering different contract options. The producer faces dynamic deterministic demand, which is known at the beginning of the planning horizon, and has to decide on the quantities of production, outsourcing, inventory carrying, and backorder. Among these decisions, the producer has the opportunity of subcontracting from a set of options offered by the subcontractors with possibly distinct contract terms. The contract options are in terms of length of the contract, fixed and variable costs associated with order placed, delivery lead-time and capacity guaranteed for use. A mathematical model is used for the evaluation of available options and for the selection of the ones in order to minimize cost incurred by the producer. The model provides desired quantities of production, inventory carrying and backorder, and also determines how different contract options will beused through the planning horizon. Extensive experimentation is performed using different factors affecting the optimal solution of the model in specific instances. These results are used in order to come up with a framework where various contracting schemes for subcontracting can be obtained. This framework can assist the producer in the decision of alternative courses of actions to be taken by him as a function of contract terms.


Automated Identification of Vagueness in the FIDIC Silver Book Conditions of Contract
Candas, Ali Bedii; Tokdemir, Onur Behzat (2022-04-01)
Contract conditions are crucial as they outline an agreement between different parties. The semantic terms in contract conditions need to be precisely designated. Where these conditions contain vague meanings, the interpretation of the conditions will vary, especially since the parties of the contract will be differently motivated to pursue their different expectations from it. The vague terms in contract conditions may thus cause a dispute and conflict among the parties that can jeopardize the eventual suc...
Contract Management Behavior and Practices of Turkish Contractors at International Contracts
Yiğit, Ma; Birgönül, Mustafa Talat; Dikmen Toker, İrem (null; 2009-05-22)
Contract management starts with the contract negotiations and lasts until the end of the contract, and is the process that covers three fundamental functions required to compensate the goals of the project; Relationship Management, Project Delivery, and Administration of the contract. This paper briefly discusses contract management behavior of Turkish construction companies in international projects; factors influencing contractors’ behaviors, key success factors for contract management, company contract m...
The Tool Coverage of Software Process Improvement Frameworks for Small and Medium Sized Enterprises
Yesildoruk, Filiz Celik; Bozlu, Banu; Demiroers, Onur (2009-06-17)
Software Process Improvement (SPI) awareness is increasing among Small and Medium Sized Enterprises (SMEs). Conventional SPI frameworks are not appealing for SMEs since they are complex and costly. There are a number of frameworks, which address the problems of SMEs for SPI. This paper presents a comparative study of the most frequently referenced SPI frameworks established for SMEs from a SPI Tool coverage perspective.
A model of competition between multinationals
Koska, Onur A (Orta Doğu Teknik Üniversitesi (Ankara, Turkey), 2015-8)
This study models competition between multinationals sequentially entering the same market, and analyzes how they choose their entry modes between trade, greenfield investment and acquisition, and how competition amongst them affects their choices. I discuss two important factors that lead a multinational whether or not to acquire a local firm: the intensity of pre- and post-acquisition competition. The former determines both the acquisition price and the profitability of the next best alternative entry mod...
A Qualitative model of the critical success factors for the effectiveness of information systems outsourcing
Uçar, Erkan; Bilgen, Semih; Yöndem, Meltem Turhan; Department of Information Systems (2012)
The objective of this research is to construct a model of the critical success factors for the effectiveness of Information Systems (IS) outsourcing. “Lack of in-house expertise” and “cost effectiveness” are the widely accepted major factors of motivation for IS outsourcing. Although various decision models and analytical frameworks have been proposed before, the literature is not abundant on a complete qualitative model. In contrast with the decision models which are executed before an outsourcing engageme...
Citation Formats
M. Özlen, “A model for contract evaluation: subcontracting under dynamic deterministic demand environment,” M.S. - Master of Science, Middle East Technical University, 2003.