Contracting out the Physical Distribution Function: A Trade‐off between Asset Specificity and Performance Measurement

Abstract

Discusses the question of whether a firm should set up an own‐account physical distribution organization or contract out the distribution function. Shows how the concepts of transaction cost economics, particularly asset specificity and performance ambiguity, can shed light on the division of responsibility for the physical distribution function between in‐house operations and outside contractors.

Citation

Aertsen, F. (1993), "Contracting out the Physical Distribution Function: A Trade‐off between Asset Specificity and Performance Measurement", International Journal of Physical Distribution & Logistics Management, Vol. 23 No. 1, pp. 23-29. https://doi.org/10.1108/09600039310025598