International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

Production Capabilities Decision Making: Biopharama, Inc, Study Case
Dr. S. Rick Fernandez, Dr. J. Pablo Betancur

This paper considers two enterprises at different countries that engage in joint production to reduce several costs. The prospect of repeated integration of simulated introduces dynamics, in that actions that enterprises take today influence the costliness and effectiveness of different actions in the close future. Repeated interaction also facilitates the use of informal agreements, but by the ongoing value system of the strategic network relationship. Authors characterize the optimal network agreement in this dynamic commercial platform. Authors show that an optimal commercial platform has a simple form that does not depend on the last period. The optimal commercial platform may require that the enterprises terminate their network with positive probability following poor performance. Authors show how process visibility, which allows the enterprises to better assess that is at fault, can substantially improve commercial network performance. The degree to which process visibility eliminates the prohibit regulation on the nature of the dynamics: If the buyer's action does not influence the dynamics, the need for termination is eliminated; otherwise, termination may be required a commercial integration.

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