Economics Dissertation

GLOBAL SOURCING

A purchase strategy in which a business looks for to find the most cost efficient location for making a product, set up location is in a foreign country. For example , if a toy manufacturer finds that manufacturing and delivery costs are lower in a foreign country due to reduce wages of foreign personnel, the company may close the domestic manufacturing plant and make use of a foreign manufacturer. Gloabal finding is defined as technique of identifying, developing and utilizing the best method to obtain suplly pertaining to the enterprise, regardless of position and global – edges (across multiple geograpies to reduce costs, improve performance and mitigate risks) * Global sourcing factors:

+ materials costs

& Transportation costs

+ products on hand carrying costs

+ cross –border income taxes, tariffs and duties

+ supply and operational overall performance

+ source and detailed risks

2. Risks:

+ hidden costs

+ ethnic differences

+

Global sourcing is a practice of sourcing in the global marketplace for goods and services across geopolitical boundaries. Global sourcing frequently aims to take advantage of global efficiencies in the delivery of a service or product. These efficiencies include inexpensive skilled labor, low cost uncooked material and also other economic factors like regulations and low trade tariffs. Common samples of globally procured products or services consist of: labor-intensive created products developed using low-cost Chinese labor, call centers staffed with low-cost British speaking personnel in the Philippines and India, and THIS work performed by cheap programmers in India and Eastern European countries. While these kinds of examples happen to be examples of Low-cost country finding, global sourcing is not limited to cheap countries. A global sourcing of products and solutions has advantages and disadvantages that can exceed low cost. A few advantages of global sourcing, over and above low cost, include: learning how to do business in a potential market, making use of skills or resources not available...



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