Global Production Outsourcing with Transfer Pricing and Tariff Concessions


  • Yanzhi David LI (Principal Investigator)Department of Management Sciences


The researchers study the outsourcing strategy for a multinational in face of the complicated international trading issues, such as the trading agreements and different tax/tariff systems. Two cases will be investigated. In the first case, the researchers assume the multinational has no own production facilities and it satisfies demand by outsourcing all the production activities. They aim to find out the optimal outsourcing plan to minimize the total delivery cost to the customers by incorporating the various international trading issues. In the second case, the researchers consider a multinational which owns some or all of the production facilities. They are interested to know how the firm can utilize the flexibility of internal transfer pricing to affect the total tax and tariff and to maximize its total profit. The ultimate goal is to work out a strategy or some policies for multinationals to turn these restrictive issues into lucrative opportunities.


Project number 7002352
Status Finished
Effective start/end date 1/11/08 -> 1/03/11