The Mexico-China Sourcing Game: Teaching Global Dual Sourcing

We describe a three-hour class on global dual sourcing built around a game that demonstrates the challenges in making operational decisions and transfers recent academic insights to the classroom. Student teams manage a firm with access to a responsive but expensive supply source (Mexico) and a cheap but remote source (China). Each team must determine a sourcing strategy to satisfy random demand that is revealed throughout the game. In each period, teams place orders to both sources and manage two assets: inventory and their bank account. The goal is to maximize each team's value (final bank balance). During the debriefings, we analyze the policies use by different teams along both financial and operational metrics, present the optimal strategy, and summarize the experimental learning points.