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17 - Managing dynamic procurements

Published online by Cambridge University Press:  04 November 2009

By
Tracy R. Lewis  and
Huseyin Yildirim
Edited by
Nicola Dimitri ,
Gustavo Piga  and
Giancarlo Spagnolo
Tracy R. Lewis
Affiliation:
Professor of Economics Duke University, USA
Huseyin Yildirim
Affiliation:
Assistant Professor of Economics Duke University, USA
Nicola Dimitri
Affiliation:
Università degli Studi, Siena
Gustavo Piga
Affiliation:
Università degli Studi di Roma 'Tor Vergata'
Giancarlo Spagnolo
Affiliation:
Stockholm School of Economics
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Summary

Introduction

Recently we considered which laptop computer to purchase for the new and returning faculty at our business school. The choice was between an old proven brand that we had been using and a new brand that was attractively priced but unfamiliar to our people. The old brand was reliable but it had not been updated much recently, whereas the new brand incorporated some advanced technology and attractive design features. Overall the new brand seemed like a better buy than the old one. But, there was a cost to switching from the old to the new brand. We would have to learn new skills to operate the new brand and our technicians would need additional training to repair and service the new machines.

We decided after much deliberation to remain with the old brand. The cost of switching computers was too high. We realized the school had become so dependent on the old technology that we were locked in. Switching to a new one was not feasible, at least not in short run. But, this was just the tip of the iceberg. We discovered there were many more products and services that we were locked into buying, including computer software, reproduction equipment, communication services, and information technology. In each case, we would need to retrain our employees and adjust our operating procedures to switch products.

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Type
Chapter
Information
Handbook of Procurement , pp. 433 - 445
Publisher: Cambridge University Press
Print publication year: 2006

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References

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