Please enable JavaScript.
Coggle requires JavaScript to display documents.
1.6 Transaction Costs in PM - Coggle Diagram
1.6
Transaction Costs in PM
What is transaction cost?
Something other than
the price incurred in trading goods and services
Types
Bargaining and decision costs
Policing and enforcement costs
Search and information costs
Example
the cost of fuel and time for travelling to buy a good for $10
Transaction costs in project management
Example of buying a new type of pump associated transaction costs
Cost of looking at bids from different contractors
Lawyer cost
The cost of engineers time to find the specs
Administrative cost
PM have a positive impact on transaction costs in the case of programmes and portfolios.
Keeping the same good suppliers lower the transaction costs and contribute to industrial leartning
"Industrial learning means that the more times a task has been performed, the less time and costs it will require in each subsequent case"
Programme management contribution to transaction costs and industrial learning (learning curve) is proved to be positive in the South Korean nuclear industry
as standardisation created through the programme lowered transaction costs and improved the learning curve.
Operational benefits of the programme management approach
Standardisation and programme management have been key to decreased "unplanned outage" event and increase the reliability of utility operations. Sungyeol Choi et al (2009
Increased "load/capacity factor"
Increased "localisation"