Outsourcing timing, contract selection, and negotiation

Tao Yao, Bin Jiang, Scott T. Young, Srinivas Talluri

Research output: Contribution to journalArticle

29 Scopus citations


This paper examines outsourcing contracts subject to irreversible outsourcing investment and cost uncertainty. We consider three common outsourcing contracts (fixed-price, cost-plus, and gain-sharing) and address issues of when to outsource and which contracts to select. Motivated by both practical importance and lack of academic research in this area, this paper compares and analyses these contracts' utilities and outsourcing options' values and assists managers in timing of outsourcing and selection and negotiation of outsourcing contracts.

Original languageEnglish (US)
Pages (from-to)305-326
Number of pages22
JournalInternational Journal of Production Research
Issue number2
StatePublished - Jan 1 2010


All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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