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Optimal knowledge outsourcing model

  • Gavious, Arieh
  • Rabinowitz, Gad

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.

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Article provided by Elsevier in its journal Omega.

Volume (Year): 31 (2003)
Issue (Month): 6 (December)
Pages: 451-457

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Handle: RePEc:eee:jomega:v:31:y:2003:i:6:p:451-457
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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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