Dispersing the Performance of Value Chain Activities to Many Different

question 97

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

• 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) All of these.

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Definitions:

Investment Banks

Firms that assist in the design of an issuing firm’s corporate securities and in the sale of the new securities to investors in the primary market.

Public Trading Companies

Corporations whose shares are listed and traded on public stock exchanges, making their ownership publicly accessible.

Adequate Capital

Sufficient funds required by a business to finance its operations and meet its obligations without facing financial distress.

Bank Run

A situation where a large number of a bank's customers try to withdraw their deposits simultaneously because they believe the bank might fail.