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It May Be Cheaper to Manufacture at Home
de Treville, Suzanne; Trigeorgis, LenosArticle HBS-R1010F-EService and Operations ManagementConventional financial tools can lead to supply chain mistakes. Most managers use the discounted cash flow (DCF) model to help them make decisions such as where to locate a new manufacturing plant or whether to use a foreign or domestic supplier. But DCF typically undervalues flexibility-and as a result, companies may end up with supply chains that are low cost as long as everything proceeds according to plan but extremely expensive if problems a...Starting at €8.20