Supply chain outsourcing under exchange rate risk and competition

Zugang Liu and Anna Nagurney

Omega, 2011, vol. 39, issue 5, 539-549

Abstract: This paper studies the impacts of foreign exchange risk and competition intensity on supply chain companies who are involved in offshore-outsourcing activities. In particular, we develop a variational inequality model that considers firms' decision-making regarding pricing, offshore outsourcing, transportation, and in-house production under competition and foreign exchange uncertainty. We also use a series of simulation examples to answer questions regarding outsourcing and pricing strategies of supply chain firms with different risk attitudes, and explore numerically their associated profits and incurred risks.

Keywords: Supply; chain; management; Variational; inequality; Outsourcing; Exchange; rate; risk (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (44)

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