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Optimal knowledge outsourcing model

Author

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  • Gavious, Arieh
  • Rabinowitz, Gad

Abstract

Every organization controls its investments in the development and maintenance of internal knowledge (IK) as opposed to outsourcing this effort, namely, consuming external knowledge (EK). A number of factors involved in this decision, such as the IK learning curve, its associated holding cost, value deterioration rate, value of future IK or cost of purchasing EK. This study proposes a dynamic optimal control model for examining the properties of this problem. Optimal control strategies and steady-state conditions are identified for a number of special cases. Some insightful observations are obtained by studying the solution sensitivity to the underlying assumptions.

Suggested Citation

  • Gavious, Arieh & Rabinowitz, Gad, 2003. "Optimal knowledge outsourcing model," Omega, Elsevier, vol. 31(6), pages 451-457, December.
  • Handle: RePEc:eee:jomega:v:31:y:2003:i:6:p:451-457
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    References listed on IDEAS

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    1. Edieal J. Pinker & Robert A. Shumsky, 2000. "The Efficiency-Quality Trade-Off of Cross-Trained Workers," Manufacturing & Service Operations Management, INFORMS, vol. 2(1), pages 32-48, July.
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    Cited by:

    1. Elitzur, Ramy & Gavious, Arieh & Wensley, Anthony K.P., 2012. "Information systems outsourcing projects as a double moral hazard problem," Omega, Elsevier, vol. 40(3), pages 379-389.
    2. Teodora Diana Corsatea, 2010. "Measuring science: Spatial investigation of academic opportunities in Belgium," Papers in Regional Science, Wiley Blackwell, vol. 89(2), pages 373-387, June.

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