A decision-making problem for product outsourcing with flexible production under a global supply chain management

Rekha Guchhait and Biswajit Sarkar

International Journal of Production Economics, 2024, vol. 272, issue C

Abstract: Any product outsourcing expands the geological boundaries of production industries under the global supply chain management. The global outsourcing increases concerns for production industries, which is less for domestic supply chain management. Two main strategy makings for product outsourcing under the global supply chain are the proper information about products and services for those products. This study examines a service-driven digital global supply chain management to find intriguing factors for product outsourcing decision-making with international tax, dollar rate, and tariff. The flexible production & the production–transportation lead time of manufacturers and two-stage safety factors of retailers are features of the digital global supply chain. Manufacturers develop a new investment strategy on radio frequency identification technology for product information sharing with retailers. Both manufacturers and retailers pay carbon tax for all products along with transportation for the environmental development. A classical optimization technique finds the global optimum profit of the global supply chain management. Numerical results establish service and safety stock of products as two decision-making factors for digital global supply chain management. The profit is high when retailers are situated in a low-economy country with high service. Retailers in a high-economy country with no service cause a 57.98% loss than the original profit. This phenomenon justifies that local customers can put their trust in buying imported products when they are sure about product-related services. Comparison, discussions, and sensitivity analysis are provided for a detailed result analysis.

Keywords: Flexible production system; Global supply chain management; Product outsourcing; Decision-making; Radio frequency identification; Logistics (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:272:y:2024:i:c:s0925527324000872

DOI: 10.1016/j.ijpe.2024.109230

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