Global supply chain management using business risk re-alignment via the change of the transfer pricing methodology

Abstract

Traditionally, Supply Chain Management (SCM) indicates a strategy enabling an enterprise to achieve optimization of stock level and reduction of lead time through application of information technology. However, such traditional SCM strategy is in contemporary business world required to reflect business economics aspects such as accounting and taxation in order for the enterprise to enjoy maximum benefits. This paper proposes a framework and methodology for optimal profit allocation to participants of multinational enterprises' global supply chain through re-alignment of certain risks assumed by each participant using financial engineering methods. © 2014 Springer-Verlag.