This paper investigates the link between off-shoring, postponement, and inventory. First, the reasons for and risks of off-shoring are stated. Then the benefits and costs of postponement are outlined, followed by how off-shoring and postponement impact inventory levels and an investigation into how the two can interact is provided. Following this the inventory impact of a set of scenarios encompassing various levels of postponement for an off-shore manufactured product are explored. Using a set of real-world data applied to a simplified product the benefits of each postponement in terms of total cost are examined. Finally, the best scenario is selected. In addition, a sensitivity analysis on the key variables is performed. Also, the fact that the combined uncertainty (due to performance cycle and demand) is the most influential input to each scenario is illustrated. A quick method for determining which term of the combined uncertainty equation will be dominant in altering the inventory level of a given strategy is identified.
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