Abstract—For many enterprises, the delocalization of a part or the totality of their supply chain to low cost countries is the best way to reduce costs and remain competitive against the growing globalized market. This new tendency is driven by logistics advantages, as well as, financial and tax discount offered by the host countries. The objective of this article is to examine the new financial challenges introduced by the project of base erosion and profits shifting (BEPS), published in 2015, and also their impact on the decision of delocalization. In fact, the strategy adopted by multinational firms for determining the transfer price (TP) of goods and services, as well as the shared amount of revenues and expenses have a major impact upon group profit and may contribute to divergent results. In order to get more profit, a coherent decision of delocalization should be based on an evaluation of all the operational and financial characteristics associated with such movement. Therefore, it is interesting to model these new constraints and integrate them in a more global decision model. The established model will enable to measure how much these financial constraints impact the decision of delocalization and will give new helpful directives for enterprise managers. Keywords—Delocalization, intragroup transaction, multinational firms, optimization model, supply chain management, transfer pricing. I. INTRODUCTION N order to remain competitive in the global market, companies are compelled to delocalize many of their activities to developing countries that offer low production costs. However, the success of delocalization is based on an overall assessment of all operational and financial criteria that impact the supply chain, as well as the geographic choice and fiscal incentives offered by potential host countries. The price of transferred goods and services among delocalized affiliates of the same group is one of the new criteria that are seldom discussed in the literature related to the relocation of firms. In fact, the transfer price has a major impact on firm’s revenues and may contribute to divergent results according to the method of its evaluation. Hence, we emphasize the examination of TP strategies that govern transactions between M. B, Industrial engineer, is with laboratory of Mechanical Modeling and Control, Faculty of Science and Techniques, Abdelmalek Essaadi University, Tangier, Morocco (e-mail: mouna.benfssahi@gmail.com). Z. E, UFR SPI professor, is with is with laboratory of Mechanical Modeling and Control, Faculty of Science and Techniques, Abdelmalek Essaadi University, Tangier, Morocco (e-mail: Elfelsoufi_zoubir@yahoo.fr). affiliates. We also give prominence to the impact of the new financial challenges that have been raised by the BEPS project in 2015. We seek to determine the optimal decision that provides more profit for the global company, by integrating these new challenges in a more global decisional model. The management of supply chains by facility location, as confirmed by Melo et al. [1] is taking increasingly more importance. This new tendency is manifested by the transfer of a part of the supply chain to other less developed sites that produce intermediate goods, whereas the finished product is assembled in a site close to the final customer. Therefrom the concept of delocalization has been raised in order to identify the operations in which the production is ensured inside the group but abroad by its own subsidiaries [2]. Once relocated, the group will be composed of a parent company and other subsidiaries located abroad and exchanging both goods and services. The values of these traded goods are valued in terms of TP. It is important to show the tremendous growth of multinational corporations. Despite the last worldwide financial crisis in 2008, multinational firms have recorded in 2014, 26.039 billion dollars on their domestic stock of direct investment abroad against 13.894 billion dollars in 2007. Also, they have employed 75 million people in 2014 while only 53 million were employed in 2007 [3]. Therefore, the management of the supply chain (SCM, i.e. Supply Chain Management) has emerged as a mandatory science in order to create value and ensure the competitiveness of enterprises. In this paper, we show particular interest in the concept of delocalization and new financial challenges impacting this activity. The remainder of this article is organized as follows: In Section II, we present the characteristics of decisional models of delocalization that are considered in the literature, and we show the importance of the financial criteria. Section III is dedicated to the description of existing classic methods for TP evaluation. The illustration of the transactional net margin method and its relation to profit shifting is given in Section IV. We then project new financial challenges introduced by the BEPS project, in Section V. Finally, we present the objective function of the model and give concluding remarks and future research directions. Mouna Benfssahi, Zoubir El Felsoufi Modeling of Supply Chains Delocalization Problems Taking into Account the New Financial Policies: Case of Multinational Firms Established in OECD Member Countries I World Academy of Science, Engineering and Technology International Journal of Economics and Management Engineering Vol:10, No:11, 2016 3770 International Scholarly and Scientific Research & Innovation 10(11) 2016 scholar.waset.org/1307-6892/10007917 International Science Index, Economics and Management Engineering Vol:10, No:11, 2016 waset.org/Publication/10007917