Global supply chain design under fluctuating antidumping tax rates for export

Abstract

Profit from exports for a country could be substantially a ected in case of a sudden increase in the antidumping tax rates of a major importing country. There have been recent fluctuations in antidumping taxes applied by countries such as US for important industries, e. g. steel production. A natural reaction of exporting countries to such unanticipated changes is to search the possibilities of new markets to export. However, extending the supply chain into new markets requires prior set up for activities such as marketing and transportation. Thus, companies subject to antidumping tax rate fluctuations for export require a decision framework for investing to create new markets to hedge for the unplanned decreases in the demand and revenues caused by increased antidumping taxes at their importing countries. In this study we present a stochastic optimization model to decide on investment for a new market and production decisions for profit maximization to hedge for sudden antidumping taxes imposed under production and transportation quantity constraints. We demonstrate the decision policies based on the values of di erent parameters such as the probability of increase in the antidumping tax rates, demand distributions and monetary parameters.