Article ID: | iaor20113789 |
Volume: | 131 |
Issue: | 1 |
Start Page Number: | 333 |
End Page Number: | 341 |
Publication Date: | May 2011 |
Journal: | International Journal of Production Economics |
Authors: | Holweg Matthias, Reichhart Andreas, Hong Eui |
Keywords: | economics |
The benefits of global sourcing as part of a firm’s purchasing strategy have been widely discussed in the academic literature, yet so there are few models that provide a comprehensive risk and cost assessment to guide managerial decision‐making. In particular, few models capture the dynamic nature of many cost drivers, such as transportation and energy cost, labour cost inflation, or carbon offset costs, in their calculations. In this paper, we define three basic cost elements in global sourcing: