ISE Professors Determine True Value of Outsourcing

June 29, 2007

Dr. Burak EksiogluDr. Burak Eksioglu, Assistant Professor of ISE, is principal investigator of a grant from the U.S. Small Business Administration to study aspects of the furniture industry in Mississippi. The $62,000 grant was facilitated by MSU’s Franklin Furniture Institute directed by Dr. Steve Taylor. Dr. Eksioglu and co-principal investigators Dr. Jilei Zhang from Forest Products, and Drs. Sandra Eksioglu and Mingzhou Jin from ISE are identifying the impact of outsourcing the manufacture of components and products on the performance of the furniture industry supply chain.

In the furniture industry, many U.S. companies see outsourcing as an option to remain competitive. For example, it is reported that the cost of buying a product from China is 20% to 30% less than the cost of producing it in the U.S. However, the cost difference does not fully capture all costs and risks associated with outsourcing furniture and furniture components. Therefore, the economic models created through this research will capture the key relationships among participants along the supply chain and the uncertainties related to lead time, defect rates, and customer demand in order to determine the true cost of outsourcing. For further information, contact Dr. Burak Eksioglu at 662.325.7625 or at