Effect of Material Prices for Global Supply Chain Network with Trans-Pacific Partnership

Abstract

Manufacturing firms are getting more global and forming global supply chain networks to pursue lower production costs and emerging markets including Asia. The global supply chain network consists of domestic as well as international suppliers, factories and markets. Then, the supply chain network applies customs duties when parts and products are transported across overseas borders. Additionally, several treaties of customs duty such as Free Trade Agreement (FTA) and Trans-Pacific Partnership (TPP) are unavoidable for designing the global supply chain network.On the other hand, current fluctuations of oil and energies price cannot be ignored for the global supply chain network. This study analyzes influences by fluctuating the material prices on the global supply chain network with the customs duty and TPP. Firstly, the global supply chain network with customs duty and TPP is modeled. Next, the model is formulated with integer programming. Finally, sensitivity analysis is conducted in order to investigate the effect on the global supply chain network by fluctuations of material prices.