COMMERCE 2OC3 Chapter Notes - Chapter 2: Operations Management, Facility Location Problem, Competitive Advantage
5 Feb 2017
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Document Summary
A global view of operations and supply chains. Increasing economic integration and interdependence of countries: domestic production and exporting may no longer be a viable business model; local production and exporting no longer guarantee success or even survival. New standards of global competitiveness that impact quality, variety, customization, convenience, timeliness, and cost. Globalization of strategy contributes to efficiency and adds value to products and services: also (cid:272)o(cid:373)pli(cid:272)ates the om"s jo(cid:271, complexity, risk, and competition are intensified. International operations seek to take advantage of the tangible opportunities to reduce their cost. Foreign locations with lower wages can help lower both direct and indirect costs. Less stringent government regulations on a wide variety of operations reduce cost. Opportunities to cut the cost of taxes and tariffs also encourage foreign operations. Shifting low-skill jobs to other countries have several potential advantages: firm can reduce cost, moving the lower-skilled jobs to a lower-cost location fries high cost workers for more valuable tasks.
