TOPIC 4236

Description

By outsourcing overseas, a company can reduce costs but must also take certain risks. Global supply
chains are exposed to more risk today than ever before.

Use your module readings, the Argosy University online library resources, and the Internet to research
the risks present in developing a global supply chain.

Then, respond to the following:

 Why is it important to consider uncertainty when evaluating supply chain design decisions?

 What are the major sources of uncertainty that can affect global supply chain decisions?
Consider the financial, logistic, political, natural, cultural, and technological sources of
uncertainty in your response.

 Explain the economic and social costs of deciding to move production overseas.

Write your initial response in approximately 300 words. Apply APA standards to citation of sources.

ANSWER.

Why is it essential to consider uncertainty when evaluating supply chain design decisions?

               Uncertainty is the state of being unsure of any given aspect, and it is a very significant aspect to
consider due to elements such as the bearing of trade and the changing values of currencies.  The two
elements are essential since they have the ability to change the state of any supply chain. Additionally,
the stability of financial systems is another source of uncertainty since one cannot tell the current
balance in the financial systems and how it may affect any business. Even if all the above elements are
tamed, it is also essential to consider the aspect of the global economy that cannot be predicted and
thus creating uncertainty in the evaluation of supply chain design decisions (Malik, Niemeyer & Ruwadi,
2011).

What are the significant sources of uncertainty that can affect global supply chain decisions? Consider
the financial, logistic, political, natural, cultural, and technological sources of uncertainty in your
response.
             As discussed earlier uncertainty is an essential aspect and, in this case, there exist various
sources of uncertainty. An unstable economic climate is regarded as the primary source of uncertainty
that has the ability to affect the global supply chain. Considering the financial aspect, a market that is
unstable impacts the supply chain. The political climate also is a significant source since though laws
passed the global supply chain may be impacted. The final source of uncertainty is the natural weather
since calamities such as floods and hurricanes can affect the economy which may, in turn, affect the
global supply chain.

                 Explain the economic and social costs of deciding to move production overseas.

Production is an essential aspect of business and in this case, a company deciding to move production
overseas. The production has to deal with the element of hiring and employing new staff to assist in
enhancing production at the new station. The company has to incur additional costs to ship and
transport both goods and raw products. Foreign nations have different taxation policies and regulations
which makes the company vulnerable to compliance. Currencies are different, and the company has to
include the aspects of currency and how it may impact the business (Ozyasar, 2017).

References

Hunkar Ozyasar. (2017). “Disadvantages of Relocating a Factory Overseas.” Retrieved from;

https://bizfluent.com/info-8655059-disadvantages-relocating-factory-overseas.html

Yogesh Malik, Alex Niemeyer, and Brian Ruwadi. (2011). Building the supply chain of the future.”
Retrieved from; https://www.mckinsey.com/business-functions/operations/our-insights/building-the-
supply-chain-of-the-future.