Get access

A PRACTITIONER'S DECISION MODEL FOR THE TOTAL COST OF OUTSOURCING AND APPLICATION TO CHINA, MEXICO, AND THE UNITED STATES

Authors

  • Sameer Kumar,

    1. university of St. Thomas
    Search for more papers by this author
    • (Ph.D. University of Minnesota) is a Professor of Decision Sciences and Qwest Endowed Chair in Global Communications and Technology Management in the Opus College of Business, University of St. Thomas. Major research interests include optimization concepts applied to design and operational management of production and service systems where issues relating to various aspects of global supply chain management, international operations, technology management, product and process innovation, and capital investment justification decisions are also considered.

  • Kristoffer K. Kopitzke

    1. Lockheed Martin
    Search for more papers by this author
    • (MBA University of St. Thomas) is a senior systems engineer with Lockheed Martin, developing radio communications products and systems for Navy applications. He has a bachelor's degree in Electrical Engineering from the University of Virginia and an MBA from the Opus College of Business, University of St. Thomas. His business interests include strategic management and corporate decision modeling in the presence of uncertain or incomplete information.


Abstract

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.

Ancillary