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UBC Theses and Dissertations

Essays in supply chain and project management Dhingra, Vibhuti

Abstract

This thesis comprises three independent essays on supply chain and project management. In the first essay, we study the role of a risk-sharing contract in managing a buyer’s reputation risk when sourcing from a potentially unethical supplier. We show that by sharing some of the supplier’s operational loss, the buyer may (in some conditions) decrease its reputational risk but this has to be balanced against an increase in the operational risk. Risk-sharing also reduces sourcing costs because the buyer takes on some of the worst-case loss of a wealth-constrained supplier. These results suggest that risk-sharing can be superior, as a procurement strategy, to conventional approaches like dual sourcing or penalty contracts. In the second essay, we examine the role of network disruptions in causing project delays. A project belongs to a large interconnected network of clients, contractors, and subcontractors—who manage multiple projects concurrently. Accordingly, a disruption in one project forces all parties to reallocate resources from other concurrent projects, causing externalities across the wider network. We use data from tens of thousands of U.S. public projects—and their networks—to quantify the importance of these network externalities. We show that a given project is delayed by 5-10%, on average, in the three-months following a disruption at concurrent projects of its client or subcontractor. This impact is greater when projects are nearing completion, have a low contract value, are non-competitively awarded, or do not include performance incentives. In the third essay, we study the impact of payment timings on project delays. We develop theories that explain how payment duration affects project completion, and generate testable hypotheses. We empirically test these hypotheses using data on U.S. public projects. Our identification strategy uses a policy amendment that expedited payments to certain federal contractors as an exogenous shock. We find that projects whose payments were expedited had significantly higher delays after the reform. We show that this effect is driven, in part, by the contractors’ financial constraints and the increased competition for the treated projects after the policy.

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Attribution-NonCommercial-NoDerivatives 4.0 International

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