Article ID: | iaor20107419 |
Volume: | 12 |
Issue: | 4 |
Start Page Number: | 692 |
End Page Number: | 707 |
Publication Date: | Sep 2010 |
Journal: | Manufacturing & Service Operations Management |
Authors: | Kwon H Dharma, Lippman Steven A, McCardle Kevin F, Tang Christopher S |
When managing projects with considerable uncertainty, such as those arising in construction, defense, and new product development, it is customary for a manufacturer (project manager) to offer contracts under which each supplier (contractor) receives a prespecified payment when she completes her task. However, there are recent cases in which the manufacturer imposes ‘delayed payment’ contracts under which each supplier is paid only when all suppliers have completed their tasks. By considering a model of one manufacturer and