Use of Low Cost Labor Continues Damaging the Twenty-First Century Supply Chain

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Table of Contents

CHAPTER 01: INTRODUCTION3

Outline of the Study3

Background of the Study3

Purpose of the Study4

Aims and Objectives4

CHAPTER 02: LITERATURE REVIEW5

CHAPTER 03: METHODOLOGY12

Research Methodology12

Secondary Data12

CHAPTER 04: DISCUSSION13

CHAPTER 05: CONCLUSION15

REFERENCES16

CHAPTER 01: INTRODUCTION

Outline of the Study

This study is divided into five chapters. The first chapter includes an introduction to the topic. The research is based on the topic “Use of Low Cost Labor Continues Damaging the Twenty-First Century Supply Chain.” The second chapter of this research is the Literature Review. In this chapter, review of studies relevant to the topic will be presented. The third chapter will highlight the methodology used for this research. In the fourth chapter, discussion will be presented. The conclusion of the thesis will be presented in the fifth chapter.

Background of the Study

A supply chain (SC) can be stated as “a system of suppliers, manufacturers, distributors, retailers, and consumers where materials flow downstream from suppliers to customers and information flows in both directions.” Independent firms constituting a SC frequently consider conflicting goals, which extend across pricing, purchasing, inventory, transportation, production, service, and other such functions. Two types of competition schema exist regarding to competitive supply chains: horizontal and vertical competitions. Vertical competition refers to conflicting goals within a chain's partners (e.g. pricing competition between manufacturer and its retailer), however horizontal competition is defined among the same types of companies with conflicting goals which may or may not belong to a single SC (Acharyulu & Shekhar, 2012).

Purpose of the Study

The purpose of this study is to identify how the use of low-cost labor is damaging the global supply chain of the 21st century. The study will highlight different disadvantages that the use of low-cost labor is creating in the current century.

Aims and Objectives

The aims and objectives of this research are:

To comprehend the concept of supply chain

To analyze recent trends in the global supply chain

To analyze the harmful effects of using low-cost labor

CHAPTER 02: LITERATURE REVIEW

Product price and service level offered by SCs are two significant factors affecting the purchasing decisions of customers in a large number of industries such as automotive, financial services, and insurance industries. In such industries, cutting product prices and investment for providing better services are two strategies, which could absorb the customers. However, from horizontal competition's point of view, market demand of a SC is not only affected from its own price and service level but also from the rival's chain price and service level. In decision making about price and service level investment, often high uncertainty exists regarding to customers' behavior and their demand. Although investing in accurate forecasting and market research methods diminish this uncertainty, forecast errors cannot be omitted from the SCs decision making. Uncertainty in demand brings about uncertainty in profits of all firms through a chain. The risk attitude of a firm determines the sensitivity towards profit or demand uncertainty. Risk-neutral firms are completely indifferent to risk involved profit uncertainty and they are only concerned about the expected ...