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Reinventing the Supply Chain Life Cycle: Strategies and Methods for Analysis and Decision Making by Stephen B. LeGrand, Marc J. Schniederjans

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21. Novelette: So You Want to Build a Plant in a Foreign Country

The decision to locate a plant in a foreign country can be triggered for many reasons. Most of them are cost related or to maintain or increase market share of sufficient sales to justify the plant in the first place. Whereas the decision to build the plant in a foreign country is made by a board of directors, operations people make it happen.

A conversation took place between our CEO and the President of a not-so-small South American country. We currently have 80% of the market share of all engines and parts imported into that country. A threshold of $50 million in sustainable business was reached last year and was used to determine whether we should build a plant there. The engines ...

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