A Study Of Outsourcing Competition Equilibrium Based On Contest Model

In recent years, rapidly changed market demand and intense competition lead to shorter product life cycle. Outsourcing has become a critical strategic decision that allow organization to develop and leverage its capability required to strengthen core competition power to compete in today's great various demand and global business environment. Therefore, investigating outsourcing service competition, especially studying the equilibrium of outsourcing service competition, is helpful for implementing outsourcing strategy efficiently, which is of great value in both theoretical and practical sense.By developing an improved outsourcing service contest model, a general supplier-allocation model based on contest model, the dissertation explores the factors influencing the equilibrium of outsourcing service competition, including the amount of demand, unit price, the number and relative cost of suppliers attending the outsourcing contest. It also studies equilibrium on condition that the cost structure of suppliers is asymmetric, suppliers' decision order is dynamic, or the buyer prefers every supplier differently. And it provides the equilibrium of outsourcing service competition in situations where there are two kinds of self-made proportion decision way.Firstlys, on the basis of developing a general supplier-allocation contest model, the dissertation explores how the factors impact on the the outsourcing service equilibrium level, such as amount of demand, unit price, and the number of suppliers and their cost. Then it analyzes the equilibrium of outsourcing service competition with asymmetric cost structure of suppliers, and studies the impact of cost asymmetry on equilibrium in each case. The conclusion shows that besides the procurement order, the equilibrium of outsourcing service competition is also influenced by the self-made possibility of the buyer, unit production cost and service cost. Concretely, it also shows that the impact of cost form on equilibrium service level and the average service level differs as the cost form is different.Secondly, the dissertation studies the equilibrium of outsourcing service competition when suppliers' decision order is dynamic or the buyer's preference is different toward every supplier. Under the conditions that the suppliers' decision order is exogenous or endogenous, it explores the equilibrium of outsourcing service competition and illustrates the impact of decision order differentia on the equilibrium. The result presents that if the decision order of suppliers is exogenous, whether it will affect the equilibrium or not depends on the cost function form, asymmetry degree of suppliers' cost, and buyer's choice to self-made. If the decision order of suppliers is endogenous, the equilibrium selected by suppliers voluntarily is probably different from the one that buyer prefers.The dissertation also studies the outsourcing service competition equilibrium when the buyer prefers some supplier, and analyzes the impact of buyer's preference on the competition equilibrium. Under complete symmetrical cost condition, the buyer's preference has negative effect on the equilibrium of outsourcing service competition, but appropriate decision preference can "correct" the negative effect of asymmetric cost structure and dynamic decision order.At the end of the dissertation, it studies outsourcing service competition equilibrium in different self-made situations. It compares the advantages and disadvantages of two kinds of self-made proportion decision way, "self-made proportion decided prior" and "self-made proportion decided posterior", in symmetric and asymmetric cost structure situations. The conclusion shows that choice of self-made way relies on the cost function form and asymmetry degree of suppliers' cost, etc.