The Mexico-China Dual Sourcing Strategy Simulation

This team-based simulation teaches students how to make strategic and operational decisions about sourcing. Students play the role of sourcing managers who must make strategic allocation decisions as they place day-to-day orders with two suppliers—one that is responsive but expensive (Mexico) and another that is cheaper but more remote (China). Each team must develop a sourcing strategy that will satisfy a random level of demand that is revealed over time. In each period teams place orders with both suppliers while managing inventory and attempting to maximize their bank account. Students experience the operational, financial, and service-related consequences of their sourcing decisions, and instructors have access to the strategies used by different teams along with financial and operational metrics to use as part of the debrief.