Managing Global Supply Strategies: Production Decisions in Aircraft Manufacturing

Publication Date

Spring 2026

College

Jack C. Massey College of Business

Department

Economics and Finance

Student Level

Undergraduate

Faculty Mentor

Dr. Colin Cannonier

Presentation Type

Poster

Summary

This case study examines production decisions in the global aircraft manufacturing industry, focusing on how firms manage dependence on international suppliers amid geopolitical uncertainty, delivery delays, and material shortages. Aircraft manufacturers rely on complex global supply chains, which can lower costs and improve specialization but also create vulnerability to disruptions in trade, transportation, and input availability. The central managerial problem is whether firms should continue relying on outside suppliers for critical components or expand in-house production to improve reliability and control.

The case applies managerial economics concepts including cost and production theory, economies of scale, transaction cost economics, and decision-making under uncertainty. It analyzes the trade-offs between outsourcing and internal production, especially differences in fixed costs, coordination, flexibility, and supply risk. Using industry evidence on delayed aircraft deliveries, supplier bottlenecks, and changing sourcing strategies, the study evaluates how global supply dependence affects operational performance and strategic choices.

The analysis suggests that while outsourcing can reduce costs under stable conditions, heavy reliance on supplier networks increases exposure to disruption when geopolitical or logistical shocks occur. The case recommends a balanced strategy of selective in-house production for critical inputs combined with supplier diversification. This study shows how managerial economics helps firms make production decisions when global integration creates both efficiency gains and strategic risk.

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