The Mexico-China Sourcing Game: Teaching Global Dual Sourcing

Transactions on Education 2010 INFORMS, Vol. 10, No. 3, May 2010, pp. 105–112

8 Pages Posted: 8 Jun 2016

Date Written: May 2010

Abstract

We describe a three-hour class on global dual sourcing built around a game that demonstrates the challenges in making operational decisions, and transfers recent academic insights to the classroom. Student teams manage a firm with access to a responsive but expensive supply source (Mexico) and a cheap but remote source (China). Each team must determine a sourcing strategy to satisfy random demand that is revealed throughout the game. In each period, teams place orders to both sources and manage two assets: inventory and their bank account. The goal is to maximize each team’s value (final bank balance). During the debriefings, we analyze the policies used by different teams along both financial and operational metrics, present the optimal strategy, and summarize the experiential learning points.

Keywords: dual sourcing; strategic sourcing; experiential learning; inventory management; total landed cost;

Suggested Citation

Allon, Gad and Van Mieghem, Jan Albert, The Mexico-China Sourcing Game: Teaching Global Dual Sourcing (May 2010). Transactions on Education 2010 INFORMS, Vol. 10, No. 3, May 2010, pp. 105–112, Available at SSRN: https://ssrn.com/abstract=2791015

Gad Allon

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Jan Albert Van Mieghem (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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