A Study On The Factors Affecting Manufacture Site Selection In Company A’s Global Strategy

This article focus on the study of the influence factors of manufacturing locationselection in the globalization strategy in A company. Based on the current manufacturingoutsourcing situation in A company, the contract manufacture need consider all thequalitative and quantitative factors including the material purchasing cost and freight cost.Therefore Company A as a manufacturing outsourcing company need consider the factorsincluding finish good freight, labor cost, carrying cost and ordering cost, even the customerservice level.This article apply the transportation problem model and economic ordering quantitytheory to the factor analysis of the quantitative factors including labor cost, freight,carrying cost, ordering cost. Work out the best solution given the target customer servicelevel. This article also describes the Quantity-Cost-Profit analysis and other methods forthe influence factors study. The goal programming theory is also applied to achieve thelowest cost target, highest service level target and prioritized target solution analysis.The sensitivity study was done on the labor cost, exchange rate of RMB and gasolineprice to see how much change will lead to the decision of moving factory from China toother country. Potential competitors like India were also put on table for thecompetitiveness analysis.