Teaching Note | HBS Case Collection | April 2013

Konys, Inc. (TN)

by Deishin Lee and Tunay Tunca

Abstract

This case describes the sourcing policy for a consumer electronics company. The company must decide how to structure contracts with their supplier—using a purchase contract, an option contract, or combination of the two. The company can also buy from the spot market. The students use a spreadsheet model with Monte Carlo simulation to analyze the contracting options.

Keywords: supply chain; contracts; option contract; uncertainty; sourcing; supplier relationship; Supply Chain;

Citation:

Lee, Deishin, and Tunay Tunca. "Konys, Inc. (TN)." Harvard Business School Teaching Note 613-094, April 2013.