Redesign of global supply chains with integration of transfer pricing: Mathematical modeling and managerial insights

This paper contributes to the literature by (1) developing a large scale optimization model that is specific to the problem of SC redesign while addressing decisions, costs, and complexity factors that are often ignored by the model-based SC design literature, (2) integrating transfer pricing in the model by using two methods, one of them is the profit split method that is dictated by the OECD transfer pricing guidelines (1995, 2010), which could be considered as a novelty in large scale SC optimization models, and (3) using the model to derive a series of insights that may be helpful for companies and governments, most of these insights are difficult to obtain without the support of models like the one developed here.