Order Allocation Decision of the Transnational Supply Chain Under Tariff Increases

Abstract:

In order to reduce the negative impact of the U.S. increase in tariffs on some goods imported from China, and to help the enterprise make decisions on orders of products manufactured by Chinese suppliers before the increase in tariffs, a U.S. enterprise in a transnational supply chain affected by the Sino-U.S. trade war was taken as the research object. The decision included whether to transfer Chinese orders to other countries after tax increase and the retail price of products sold in the United States. Based on each order distribution scheme, the profit model was established and solved to get the optimal scheme. The analysis results show that both Chinese and American enterprises in the transnational supply chain have been negatively affected by the tariff increase. In addition, the sensitivity analysis of several parameters affecting the decision results was carried out, and some suggestions were given based on the analysis results.

Key words:tariff rate;order allocation;export price;market transfer;US retail price