Exchange rates and trade tariffs assessment for strategic decisions in supply networks configuration

This paper seeks to address the strategic design of suitable supply network configurations in response to market fluctuations in exchange rates and trade tariffs that may take place in international trade scenarios. Using a simulation model and experimental design methods, the impact that both variables have on the profitability of the products supplied to the market is analyzed. Different configurations of a supply network belonging to a world leader manufacturer of components for the appliances sector are considered. Each configuration is evaluated by simulation from a set of economic scenarios resulting from combinations of exchange rates and trade tariffs values belonging to the countries involved in the supply network. As a result of the study, the effect of each variable on the product margin is presented and some decision criteria are introduced allowing the company to adapt quickly and efficiently its supply network to each specific situation of the market.