Quantitative decision support for network integration of start-up companies

Martin Steinrücke and Wolfgang Albrecht

International Journal of Globalisation and Small Business, 2016, vol. 8, issue 1, 73-99

Abstract: Start-up companies increasingly depend on inter-organisational relations. To ensure sustainable market success of entrepreneurs, it can be advisable to cooperate with existing value-adding structures, such as dynamic networks. The latter adapt flexibly to changing market situations and high competition on a medium-term scale. In this paper, the authors evaluate the benefits of temporary network integration on the basis of commonly gained profits. For this purpose, they develop a mixed-integer linear programming model, which is extended to analyse the integration of one or more facilities of a start-up company. Cooperation requires that entrepreneurs and network managers coordinate the availability of their facilities and capacities, their operations and the material flows to meet the given demand. In this context, the authors do not only consider decisions about the advantage of integration, but they also calculate two different threshold levels determining those product quantities that can be maximally fed into the network by the new partner. Finally, a numerical study is presented. Structural relationships and optimal solutions are depicted for a small problem instance. A scenario analysis with randomly generated data is used to show that satisfying solutions can be obtained for problem instances with realistic settings in acceptable computation times.

Keywords: dynamic networks; medium-term planning; mixed integer linear programming; MILP; network integration; start-up companies; start-ups; quantitative decision support; coordination; cooperation; entrepreneurship. (search for similar items in EconPapers)
Date: 2016
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