Dispersing the Performance of Value Chain Activities to Many Different

question 124

Multiple Choice

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations, except

• A)when high transportation costs make it expensive to operate from central locations.
• B)whenever buyer-related activities are best performed in locations close to buyers.
• C)if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations.
• D)when it is desirable to hedge against (1)the risks of fluctuating exchange rates, (2)supply interruptions, or (3)adverse political developments.
• E)if resources retain their foreign contexts so there is competitive advantage over a broader domain.

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Definitions:

Surety's Obligation

A legal responsibility assumed by a surety, guaranteeing the performance or obligations of another party.

Debt

Money owed by one party to another under the condition of repayment.

Surety

A financial guarantee by a third party (the surety) to cover a debtor's obligations in case of default.

Rights to Collateral

Legal entitlements of a secured creditor to seize and sell the collateral if the debtor fails to fulfill the obligations of the loan or debt agreement.