Research Reports from the Department of Operations
Document Type
Dissertation
Publication Date
5-1-1989
Abstract
Countertrade literature to date has concentrated ondiscussing the motivations, reasons, and advantages of specificcountertrades and the negotiation contract requirements fortransactions between countries. However, developing ascience-based decision model for countertrade has drawn littleattention in the literature. Increasing importance ofcountertrade in the world market requires a systematic decision-making process in order to reduce the transaction negotiationtime and cost, and increase profitability of a country or aninternational company.This thesis attempts to improve the countertradenegotiation process by recognizing a hierarchy of objectives tobe met in 1) Picking the proper negotiation partner. 2)Selecting the proper quantities of the different goods to betraded. The first objective is addressed by a total weighted scoring model which is based on the hierarchical structure ofthe attributes in countertrade. Four methods to determine theweights of the decision model are discussed. The secondobjective is achieved by using Multiple Objective MathematicalProgramming, which invokes either Utility Theory or GoalProgramming. Negotiation using Utility Theory uses theweighted fractional reduction of the utility to generate thenext proposal for negotiation. Thus, the meaning of thisnegotiation process is to determine an appropriate weight forboth parties in the level of the utility reductions.Negotiation involving Goal Programming uses a proper mix ofthe two models, e. g. the Archimedian model and the preemptivemodel, along with the nature of the Countertrade problem. Analgorithm for the negotiation process is provided. Theintegrated systematic approach is illustrated by delineatingthe general logic diagram of the negotiation procedure.
Keywords
Operations research, Countertrade, International trade, Negotiation in business, Mathematical optimization, Decision making--Mathematical models, Utility theory, Programming (Mathematics), Algorithms
Publication Title
Dissertation/Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University
Issue
Technical memorandum no. 688 ; Submitted in partial fulfillment of the requirements for the Degree of Doctor of Philosophy.
Rights
This work is in the public domain and may be freely downloaded for personal or academic use
Recommended Citation
Park, Kil Ju, "A systematic approach to countertrade decision making analysis" (1989). Research Reports from the Department of Operations. 386.
https://commons.case.edu/wsom-ops-reports/386
