TY - JOUR
T1 - Contract costing in outsourcing enterprises
T2 - Exploring the benefits of discrete-event simulation
AU - Liston, Paul
AU - Byrne, James
AU - Byrne, P. J.
AU - Heavey, Cathal
PY - 2007/10
Y1 - 2007/10
N2 - Outsourcing is a business strategy that has received much attention. An increase in outsourcing has a direct influence on the complexity of supply chain networks and on the number of contracts required to manage a supply chain. Outsourcing contracts may be entered into relatively quickly without a full understanding of the true cost implications. The research described here aims to develop tools based on discrete-event simulation to aid outsourcing companies when costing contracts. Currently available software for this type of application is reviewed. A field study is presented from the electronics sector, describing companies' needs with respect to contract costing and how simulation could be used in the contract costing process. Simulation approaches are described for different contract costing scenarios. The paper concludes with a case study of a preliminary simulation model that has been developed to test the concept with a specific outsourcing scenario.
AB - Outsourcing is a business strategy that has received much attention. An increase in outsourcing has a direct influence on the complexity of supply chain networks and on the number of contracts required to manage a supply chain. Outsourcing contracts may be entered into relatively quickly without a full understanding of the true cost implications. The research described here aims to develop tools based on discrete-event simulation to aid outsourcing companies when costing contracts. Currently available software for this type of application is reviewed. A field study is presented from the electronics sector, describing companies' needs with respect to contract costing and how simulation could be used in the contract costing process. Simulation approaches are described for different contract costing scenarios. The paper concludes with a case study of a preliminary simulation model that has been developed to test the concept with a specific outsourcing scenario.
KW - Contract costing
KW - Discrete-event simulation
KW - Outsourcing
KW - Request for quotation
KW - Supply chain management
UR - http://www.scopus.com/inward/record.url?scp=34548500130&partnerID=8YFLogxK
U2 - 10.1016/j.ijpe.2007.02.012
DO - 10.1016/j.ijpe.2007.02.012
M3 - Article
AN - SCOPUS:34548500130
SN - 0925-5273
VL - 110
SP - 97
EP - 114
JO - International Journal of Production Economics
JF - International Journal of Production Economics
IS - 1-2
ER -