Globalization has inexorably affected the economies of many nations in both the developed and developing world. As a consequence, national boundaries are becoming less important to the large, multinational corporations who now operate on a global scale. Corporate global networks range from short term outsourcing contracts to long term investments in developing countries that offer low cost operations and/or the promise of future market expansion. Today the Internet and high-speed data networks enable knowledge tasks to be completed practically anywhere in the world, allowing companies in the developed world to achieve cost savings or simply stay competitive enough to survive by shifting work offshore (Saunders, 2003; Schultz, 2004). As a result, an increasing shift of work to low-cost countries will continue for the foreseeable future.
Key Terms in this Chapter
Outsourcing: Transferring an operation or operations to an outside vendor. Offshore outsourcing (offshoring) refers to the transfer of operations to a vendor overseas.
Global Supply Network: Transnational network of retailers, distributors, transporters, suppliers, and manufacturers that participate in the process of production and/or service. The term “global supply chain” is used interchangeably.
Decision Analysis: Formulation of models and interpretation of systems to generate the optimum set of choices that will lead to the best consequences.
Multi-Objective Optimization: Optimization of mathematical models that share the same decision variables but differ in their objectives and constraints.
Multi-Criteria Decision Making (MCDM): Methods that are designed to solve decision problems incorporating multiple-criteria whose solutions often result in conflicting objective values.