Performance Contracting in After-Sales Service Supply Chains

@article{Kim2007PerformanceCI,
  title={Performance Contracting in After-Sales Service Supply Chains},
  author={Sang-Hyun Kim and Morris A. Cohen and Serguei Netessine},
  journal={Management Science},
  year={2007},
  volume={53},
  pages={1843-1858}
}
Performance-based contracting is reshaping service support supply chains in capital-intensive industries such as aerospace and defense. Known as “power by the hour” in the private sector and as “performance-based logistics” (PBL) in defense contracting, it aims to replace traditionally used fixed-price and cost-plus contracts to improve product availability and reduce the cost of ownership by tying a supplier's compensation to the output value of the product generated by the customer (buyer… CONTINUE READING

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