Presenting Total Landed Cost Models in Business and Accounting Classes

Abstract

The decision to employ Low Cost Country Sourcing (LCCS) involves both strategic and cost considerations. This paper addresses the strategic issues and implements a simple total landed cost model (TLCM); it does not include all of the complexities of the real world, but it provides enough detail for students to have a class discussion of TLCMs and the strategic issues involved in LCCS. The paper and accompanying model area potentially useful in a number of classes: Production/Operations Management, Supply Chain Management, Managerial Accounting, and Cost Accounting. The TLCM uses some statistics and basic cost accounting and hence is accessible to junior and senior business students and first year MBA students.