What criteria should the company use to make a decision on where to manufacture the device and whether to outsource the manufacturing or control it internally?hope this explains what I'm...
What criteria should the company use to make a decision on where to manufacture the device and whether to outsource the manufacturing or control it internally?
hope this explains what I'm doing......Assume the role of top management at a major global electronics company that is developing a wireless device capable of on-demand music and video downloads from anywhere on the globe.
If it is a given that the device can be used anywhere in the globe, the assumption must also be made that some transport cost will be a given. If this is the case, some consideration must be made as to the most central location of manufacturing the device and how costs of transportation from there to the various markets compares with costs of bringing in raw materials, labor costs, etc., compared to other locations.
Since labor costs are often the most important, they would likely come first and so the company must find a place where enough unskilled or skilled labor is available and available at a price that will not destroy the profitability of the device being manufactured. So the least expensive place for production will likely be the one with the lowest labor costs, barring other considerations like political stability or environmental concerns which are usually pretty far down the list.
After that, considerations about releasing the plans and other information about the device to an outside company for production bring with them concerns about the safety of intellectual property regarding the device, and so that must also be a consideration as this decision is being made.