A real options approach to manage flexible contracts in the telecommunication networking industry

One of the biggest challenges facing Original Equipment Manufacturers (OEMs) and Electronic Manufacturing Services (EMS) providers in the telecommunication networking industry is to predict the spending patterns of the telecommunication service providers due to uncertainties in the economy, intense competition, short product life cycle in the industry and many other factors. While studies over the years have focused on optimizing the expected profits by minimizing the risk of excess inventory, companies are also unwilling to forgo profits on unmet demand. This is especially so in a market that is worth well over $100 billion even during the economic downturn. Including the cost of damaged relationships and future market opportunities, the cost of lost sales can be very significant the increasingly competitive market. This thesis explores the use of real options to enable a telecommunication networking company to structure their supply chain so as to better exploit the upside opportunities

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2004

Author dc:creator

• Tay, Ee Learn, 1968-

Advisor dc:contributor.advisor

• Christopher Caplice.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/28515

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/28515