# title
A METHODOLOGY FOR THE COMPREHENSIVE ASSESSMENT OF INTERNATIONAL PROCUREMENT COSTS

# abstract
As the economy becomes more globalized and competitive, firms are manufacturing goods in a wider variety of locations. This may be to reduce costs by moving to a low cost country or to place production closer to potential customers. What is often lacking in these decisions is a holistic assessment of the costs associated with production location decisions. Too often the assessment is focused only on a limited set of cost factors (e.g., direct manufacturing and shipping) and does not take into account the dynamic nature of some costs. To address these limitations a comprehensive cost model to assess the cost of procuring goods from alternative locations is presented. A methodology is detailed for monetizing the numerous costs associated with international procurement. An illustrative case study analyzing the procurement of goods from two locations in Mexico and one in the US is detailed. Results of the case show that the non-direct manufacturing costs associated with procurement (e.g., inventory holding costs and shipping) can be greater than direct manufacturing costs. The effects of fuel and labor cost sensitively on the alternative locations is also detailed.Copyright  2012 by ASME

# publicationOutlet
PROCEEDINGS OF THE ASME INTERNATIONAL DESIGN ENGINEERING TECHNICAL CONFERENCES AND COMPUTERS AND INFORMATION IN ENGINEERING CONFERENCE, VOL 5

# nameOfConference
Volume 5: 6th International Conference on Micro- and Nanosystems; 17th Design for Manufacturing and the Life Cycle Conference

# authors[].organizations[].label
Texas A&M Engineering Experiment Station (TEES)

# authors[].organizations[].label
Institute for Engineering Education and Innovation

# authors[].organizations[].label
Institute for Engineering Education and Innovation

# authors[].organizations[].label
Texas A&M Engineering Experiment Station (TEES)

# keywords[]
3509 Transportation, Logistics And Supply Chains

# keywords[]
35 Commerce, Management, Tourism And Services

# authorList[]
Johnson, M. D., Sawaya, W., & Natarajarathinam, M.