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Evaluating Marketplace versus Direct Connection Value Propositions in Supply Chain Management

This analysis by Ricki G. Ingalls, Ph.D., and Loay Sehwail, Ph.D. Candidate, explores the value propositions of marketplace models compared to direct connections in supply chains. Key factors include administrative and technical costs, average hourly rates for technical and administrative staff, and the number of suppliers involved. The study examines the connectivity and maintenance phases, detailing the time and cost considerations from both buyers' and suppliers' perspectives, while also incorporating the cost of building an in-house hub to facilitate direct connections.

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Evaluating Marketplace versus Direct Connection Value Propositions in Supply Chain Management

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  1. OU03-01 Modeling the Value Proposition of the Marketplace vs. Direct Connection Ricki G. Ingalls, Ph.D. Loay Sehwail, Ph.D. Candidate Oklahoma State University Center for Engineering Logistics and Distribution

  2. Inputs • Costs ( Administrative and Technical Cost) • Technical Staff Average Hourly Rate • Administrative Staff Average Hourly Rate • Number of Suppliers • The number of supplier Conoco-Phillips plan to exchange documents with electronically. • Connectivity Time • Number of hours needed for the connectivity phase in the marketplace and direct connect scenarios from the buyer side. • Number of hours needed for the connectivity phase in the marketplace and direct connect scenario from the supplier side. • Maintenance Time • Number of hours needed for the maintenance phase in the marketplace and direct connect scenario from the buyer side. • Number of hours needed for the maintenance phase in the marketplace and direct connect scenario from the suppliers side. • Cost of building an in house hub to enable the direct connect to type IV and type V suppliers ( Explained later).

  3. Types of Suppliers in the Connectivity Phase

  4. Cost Analysis Phase

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