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Keywords:

  • China;
  • Mexico;
  • Modeling;
  • Offshoring;
  • Outsourcing;
  • Statistical analysis

Outsourcing of manufacturing to Mexico and China includes costs that are not always considered and benefits that are not always correctly quantified. An analytical model for determining outsourcing costs was developed and results from that model are presented. Using that model, the sensitivity of outsourcing costs to several variables was modeled and analyzed. Guidance is provided regarding factors to consider in an outsourcing decision.