Incorporating supplier's learning in buying bundles

M.M. Linthorst, Jan Telgen, Fredo Schotanus

Research output: Chapter in Book/Report/Conference proceedingConference contributionAcademicpeer-review

12 Downloads (Pure)

Abstract

We consider the situation in which a purchaser can either buy a large quantity at the same time or sequentially in a number of smaller lots. Buying in a number of smaller lots obviously increases transaction costs. But buying in smaller lots provides the opportunity to the supplier to learn by discovering the true costs of supplying every lot. This is especially interesting for purchasers (and suppliers) operating in markets where little is known about the true costs of supply or where small margins require very accurate estimates. Using optimal learning modeling we analyze the effect of incorporating learning possibilities for suppliers into the bundling decision of the purchasing manager. We show that incorporating learning into bundles can have a significant effect on the total cost of acquisition. These results show purchasing managers the importance of an underestimated effect in bundling decisions: the learning effect
Original languageEnglish
Title of host publicationProceedings of the 18th IPSERA Conference, Wiesbaden Germany, 5-8 April 2009
Pages1260-1274
Publication statusPublished - 5 Apr 2009
Event18th Annual IPSERA Conference 2009: Supply Management - Towards an Academic Discipline? - Wiesbaden, Germany
Duration: 5 Apr 20098 Apr 2009
Conference number: 18

Conference

Conference18th Annual IPSERA Conference 2009
CountryGermany
CityWiesbaden
Period5/04/098/04/09

Keywords

  • METIS-261560
  • IR-74074
  • Learning
  • purchasing decisions
  • contract forms
  • Bundling

Fingerprint Dive into the research topics of 'Incorporating supplier's learning in buying bundles'. Together they form a unique fingerprint.

  • Cite this

    Linthorst, M. M., Telgen, J., & Schotanus, F. (2009). Incorporating supplier's learning in buying bundles. In Proceedings of the 18th IPSERA Conference, Wiesbaden Germany, 5-8 April 2009 (pp. 1260-1274)