Abstract
With the supply chain model and global procurement becoming increasingly
popular due to the global demands of today’s economy, companies are committing
themselves to multiple business-to-business relationships. Establishing the new
relationship between the customer company and vendor company within the supply chain
is a complex process that is contract intensive in nature. The purpose of this research is
to identify the key elements of the contracts between customer and vendor companies,
translate these findings into a theoretical model of the ideal contract between customer
and vendor companies, and to identify the nature and implications of problems that arise from insufficiently addressing any of the key elements within these contracts. Responses
from interviewees reinforced the theoretical model and also showed a connection
between the outsourcing contract itself and the bullwhip effect. Finally, this research
shows that the strength of the outsourcing contract and strength of the bullwhip effect are
interrelated.
