In this paper we examine contracts to coordinate the capacity decision of a vendor who has been hired by a client to provide call center support. We consider a variety of contracts, all based on our observations of contracts used by one large vendor. We examine the role of different contract...

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. The objective of the system operator (the client) is to minimize the sum of staffing costs, customer waiting costs, and mistreatment costs due...

Outsourcing of equipment repair and restoration is commonly practiced by firms across many industries. The operational performance of the equipment is determined by joint decisions of both the firm and the service provider. Although some decisions are verifiable (and thus directly contractible),...

We compare two strategies for outsourcing the development of information services projects: multisourcing and single-sourcing. We model these sourcing strategies when incentive contracts are based on a verifiable project metric that may or may not be aligned with the project outcome. We also...

This study compares the efficacy of some commonly observed vendor selection and contracting mechanisms with respect to two key challenges in service outsourcing: vendor selection and contract efficiency. We show that competitive bidding yields good selection but contract inefficiency (positive...