APPLYING OPTION VALUATION METHODS FOR ANALYZING OUTSOURCING DECISIONS
APPLYING OPTION VALUATION METHODS FOR ANALYZING OUTSOURCING DECISIONS
Abstract
Outsourcing has become a popular choice and a serious industry powering economic growth of entire regions and even countries. There are different reasons why outsourcing may be the best way to go for companies regarding specific activities and that depends a lot on the type of the activity. This paper presents a way to study and quantify outsourcing decisions using option valuation methods. Fundamental types of outsourcing services are discussed so demonstrate how their characteristics fit in option valuation methods.
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