Question: This case involves an outsourcing decision. On the one hand, a Chinese supplier has bid a low price for the business, but this incurs substantial

This case involves an outsourcing decision. On the one hand, a Chinese supplier has bid a low price for the business, but this incurs substantial transportation, lead-time, and inventory costs, to a domestic quote from a supplier located in Auburn Hills, Michigan. The purchase involves a wiring harness, and entails some fairly complex calculations, in terms of converting pounds, square feet, and unit costs. While the cost calculations produce what is apparently a relatively straightforward decision, students should be encouraged to consider other elements in the case that could influence the decision (especially in an automotive industry environment). Some of these other considerations include the cost of:

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!