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| Date: |
March 11, 2011 (Friday) |
| Time : |
11:00am - 12:30pm |
| Language : |
English |
| Venue : |
Room 602, Meng Wah Complex, The University of Hong Kong |
| Presented By : |
Dr. Hsiao-Hui Lee, Visiting Assistant Professor, University of Connecticut |
| Seminar title : |
Outsourcing a Two-Level Service Process |
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| Abstract: |
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This paper studies outsourcing decisions for a two-level service process in which the first level serves as a gatekeeper for a second level of experts. Our model of this system has three decision variables: staffing levels of gatekeepers and experts and the referral rate from gatekeepers to experts. The model's objective is to minimize cost, defined as the sum of staffing costs, customer waiting costs, and mistreatment costs. Here, mistreatment is an unsuccessful attempt by a gatekeeper to solve the customer's problem. We consider four outsourcing options: outsourcing a system with no gatekeepers (direct access to experts only), outsourcing the gatekeeper, outsourcing the expert, and outsourcing both. For the first three options, we identify contracts that achieve the first-best result for the client, but such a client-optimal contract may not exist when outsourcing both gatekeepers and experts to a single vendor unless the exogenous system parameters satisfy a particular (and unlikely) coordination condition. A frequent justification for outsourcing is that the vendor's labor costs for gatekeepers and/or experts are lower than the client's, and we numerically examine when these labor cost advantages point toward a particular outsourcing option. |
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| All Interested are Welcomed: |
The paper will be available on request.
Request for presentation papers or enquires, please contact:
Miss Helen Chung
Tel: 2859 1000 or hchung@business.hku.hk |
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