Re-design of global supply chains with integration of international factors

This paper presents an optimization model for the re-design of supply chains in the global context. Several international factors are considered in the model (exchange rates, taxation, etc.). In addition to logistics decisions, the model determines the transfer prices of the products shipped between the sites of the company. The transfer prices are calculated by using the profit split method. This method is dictated by international tax regulations and accepted worldwide. Experimental analyses are conducted in order to prove the feasibility and the solvability of the model and to show the impacts of including transfer pricing on supply chain decisions.