Towards the Consideration of Performance Risks for the Design of Service Offers

  • Björn Schmitz
  • Axel Kieninger
  • Gerhard Satzger
  • Hansjörg Fromm
Conference paper
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 169)

Abstract

This work analyzes an outsourcing provider’s challenge to design optimal service offers in a setting in which future service performance is uncertain and the provider is penalized or rewarded for deviating negatively or positively from performance guarantees. In particular, we address the question how outsourcing providers with different risk attitudes should mitigate service performance risks by incorporating uncertainty premiums into service prices. The problem is studied in the light of service incident related penalty and reward functions that tie payments to the adverse financial impact a service customer incurs from performance degradations.

Keywords

Performance Risk Uncertainty Premiums Service Offer Design Decision Support 

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Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  • Björn Schmitz
    • 1
  • Axel Kieninger
    • 1
  • Gerhard Satzger
    • 1
  • Hansjörg Fromm
    • 1
  1. 1.Karlsruhe Service Research InstituteKarlsruhe Institute of TechnologyKarlsruheGermany

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