Zoltek Metal Works is located in the same city as its major customer Nobel Homes. Zoltek makes platforms for Nobel Homes manufactured homes. Nobel places the manufactured home it builds on top of the platform it purchases from Zoltek. Zoltek faces both a site-specific and asset-specific hold-up problem.

Dedert Corporation also faces an asset-specific and site specific hold-up problem with its major customer Blue Star Energy. Blue Start Energy, a firm founded by research scientists, has begun to produce ethanol from switch grass. Dedert Corporation supplies sophisticated filtration equipment to purify the raw ethanol produced by Blue Star.

Which firm, Zoltek or Dedert, should enter into a long term contract with its supplier to mitigate the hold-up problem and which firm should vertically integrate with its supplier to mitigate the hold-up problem? Explain your answer.