University of Twente Student Theses
Mechanism design and how it could enhance the purchasing performance: Processes, success factors, selection criteria, and price developments
Schulze Horn, Ines (2016) Mechanism design and how it could enhance the purchasing performance: Processes, success factors, selection criteria, and price developments.
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| Abstract: | This paper focuses on mechanism design (MD) based negotiations. In this context, negotiations are regarded as strategic games, in which buyers and suppliers interact directly to determine optimal price levels. Although research on MD theory increased in the past and many buying organisations use this theory to design negotiations that aim at lowering purchasing prices, the topic still appears to be somewhat underrepresented in the ‘traditional’ purchasing and supply management literature. To close the gap between purchasing practice and supply management literature, the study at hand provides a non-technical introduction to MD theory and explores the benefits of applying it in the purchasing field. Additionally, a case study was conducted at a European automotive original equipment manufacturer. The results are used to develop process flow descriptions that compare conventional and MD based sourcing approaches. Furthermore, seven success factors are identified that highlight the peculiarities of this negotiation method. The analysis also resulted in a catalogue of criteria helping to identify the most promising sourcing projects for the application of MD theory. Finally, three mechanisms have been identified that were applied most often by the OEM to illustrate which mechanisms might be used by buying organisations. Two sourcing projects have subsequently been taken as exemplary cases to describe how mechanisms can influence purchasing prices. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics, 85 business administration, organizational science |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/70877 |
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