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
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;
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