Abstract
We study the economics of the outsourcing decision from a supply chain dynamics perspective. Production can be either in the UK, where products are delivered on trucks to a UK warehouse, or in China where product is shipped via a container liner to a UK warehouse. We show that the traditional “landed cost” approach of purchase price plus transport costs overestimates the benefit from outsourcing products to China. However, the dynamic costs associated with the pipeline inventory, the UK inventory & the UK warehousing capacity costs associated with unloading the containers is not large enough to change the outsourcing decision.
| Original language | English |
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| Title of host publication | Proceedings of the 18th International Symposium on Logistics: Resilient Supply Chains in an Uncertain Environment |
| Place of Publication | Nottingham |
| Publisher | Centre for Concurrent Enterprise, Nottingham University Business School |
| Pages | 723-731 |
| Number of pages | 9 |
| ISBN (Print) | 9780853582922 |
| Publication status | Published - 7 Jul 2013 |
| Event | Proceedings of the 18th International Symposium on Logistics: Resilient Supply Chains in an Uncertain Environment - Vienna, Austria, 7-10th July, 2013 Duration: 7 Jul 2013 → … |
Conference
| Conference | Proceedings of the 18th International Symposium on Logistics: Resilient Supply Chains in an Uncertain Environment |
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| Period | 7/07/13 → … |