Title: A framework of analysing virtual transfer pricing mechanisms in global supply chain

Authors: Kun Liao; Ke Ke; Yan Wang

Addresses: Department of Finance and Supply Chain Management, College of Business, Central Washington University, Lynnwood, 20000 68th Ave W, Lynnwood WA 98036, USA ' Department of Finance and Supply Chain Management, College of Business, Central Washington University, Des Moines, 2400 S 240th Street, P.O. Box 13490, Des Moines, WA 98198, USA ' T-Mobile USA, 12920 SE 38th St, Bellevue, WA 98006, USA

Abstract: Supply chain is a network of financial flow while contract is a primary way of recognising and distributing profits between buyer and supplier in a supply chain. Virtual transfer pricing defined in this study is the mechanism of using contract bundles within a global supply chain to maximise profit. We propose three virtual transfer pricing models. The models are articulated with mathematical presentations for clarity. This is one of the first studies to identify basic components of virtual transfer pricing which have significant implications for firms in global supply chains as well as governmental tax agencies all over the world.

Keywords: virtual transfer pricing; contract pricing; profit optimisation; global supply chain.

DOI: 10.1504/IJTPM.2018.093851

International Journal of Technology, Policy and Management, 2018 Vol.18 No.3, pp.222 - 233

Received: 14 Jun 2017
Accepted: 20 Sep 2017
Published online: 07 Aug 2018 *

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