Fuyao Glass America: Sourcing Decision
In today's global economy, what are the factors that go into production location choice? This case is set in the world's largest automotive glass producer as it expands from China into the United States. To meet a very aggressive cost target, management is faced with the alternatives of fulfilling the contract from its new Ohio factory, which can only produce above the target cost currently because it is still on a learning curve, or it can fulfill from its Tianjin, China factory which can produce below the cost target but will incur extensive shipping costs and require a far great amount of inventory holding. This case examines a core question facing managers who want to produce physical products for world markets.