Total cost of ownership calculation in captive offshoring decisions of German manufacturing firms
In this paper, a TCO calculation model for captive offshoring decisions of German manufacturing firms is developed to support the problem of a high level of backshoring activities due to insufficient ex-ante cost calculation. The developed model extends approaches from the current literature and provides a comprehensive tool that can support a firm’s decision-making on offshoring. The applicability was tested on an offshoring case of a German manufacturer, by using publicly available information. The results suggest that the decision would probably not have been made, if it had been analyzed on the basis of the TCO calculation model.