Product costing in the strategic formation of a supply chain

Renato Matta ()
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Renato Matta: University of Iowa

Annals of Operations Research, 2019, vol. 272, issue 1, No 18, 389-427

Abstract: Abstract This study presents manufacturing and distribution network models for strategic supply chain planning. Where prices of intermediate products in the supply chain are not readily available, we study the influence on the formation of the supply chain of using either direct product costing or full absorption costing for setting internal prices. We develop a generalized Benders decomposition-based approach to solve the models. Problems representing a variety of scenarios that simulates different economic environments are solved. Our computational results show that the product costing method could influence the concentration of production activities at potential manufacturing locations, production and shipment quantities, product prices, and allocation of profits in the supply chain.

Keywords: Decision support models; Supply chain management; Pricing; Supply disruption; Operations management; Capacity planning (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10479-017-2463-x

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