Which of the Following Is TRUE with Regard to Strategies

question 80

Multiple Choice

Which of the following is TRUE with regard to strategies for minimizing the risks of global sourcing?

• A) To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources.
• B) To maximize returns and minimize risks, management should outsource core business operations.
• C) Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes.
• D) Firms must refrain from maintaining their own sourcing operations abroad in order to trim costs and minimize risks stemming from frequent currency fluctuations.

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Definitions:

Rate of Inflation

The pace at which the overall price level of goods and services increases, diminishing the buying power.

Probability Distribution

A statistical descriptor that comprehensively outlines all viable outcomes and their likelihoods for a random variable within a set boundary.

Expected Holding-Period Return

The total return anticipated on a bond if it is held until the end of its lifetime or holding period, including interest payments and capital gain or loss.