In section 2 we gave a review of the general outsourcing literature along with examples from the furniture industry. In this section we will provide a description of the simulation model that is developed to illustrate the supply chain structure of a typical furniture manufacturer in Mississippi. The simulation model allows managers of furniture companies to estimate the impact of various decisions related to outsourcing on the performance of the supply chain. The model is used to perform “what-if” analyses. For example, the decision makers are able to adjust parameters such as defect rate, lead time.
