A Cost Model for Offshore Outsourcing: TLCM
William Roach and Thomas Clevenger
Washburn University, USA
Volume 5: 2011, pp. 53-68; ABSTRACT
The decision to employ Low Cost Country Sourcing (LCCS) involves both strategic and cost considerations. This paper addresses the tactical issues and implements a simple total landed cost model (TLCM); it does not include all of the complexities of the real world, but it provides enough detail for students to have a class discussion of TLCMs and the strategic issues involved in LCCS. The paper and accompanying model are potentially useful in a number of classes: Production/Operations Management, Supply Chain Management, International Operations, Managerial Accounting, and Cost Accounting. The TLCM uses some statistics and basic cost accounting and hence is accessible to junior and senior business students and first year MBA students.
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