Track: Operations Management and Operations Research

Abstract

In order to maintain their level of competitiveness in the globalized market, multinational firms are undeniably confronted to make strategic choices to increase their profit and ensure their sustainability. The re-design of multinational groups by the relocation of a part of their supply chain or the totally of it to other countries are among the crucial decisions of the supply chain management. We provide the most important factors that drive the Multinational firms to delocalize. Through this article we define an analytical model of decision making tool for delocalization taking into account the financial constraints of potential destinations. We present then new financial guidelines and recommendation by the Organization for Economic Cooperation and Development (OECD) in terms of profitability and cost allocation. Through a case study of tangible and intangible activities, we evaluate the impact of financial policies and specially the transfer pricing policies on the amount of manufacturing capacity to relocate. We give managerial insights ad new directives to be explored for feature works in the context of delocalization.