Dispersing Particular Value Chain Activities Across Many Countries Rather Than

question 41

Multiple Choice

Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous except when

• A) buyer-related activities (such as sales,advertising,after-sale service and technical assistance)need to take place close to buyers.
• B) buyers demand short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations.
• C) it helps hedge against the risks of exchange rate fluctuations,supply disruptions,and adverse political developments.
• D) there are diseconomies of scale in trying to operate from a single location.
• E) there are reasons to decouple buyer-related activities in favor of locational advantages.

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Definitions:

Shares Of Stock

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Cash

Physical or digital money in hand or readily available for transactions or use.

Convertible Debt

A short-term loan that can be turned into equity when future financing is issued.

Convertible Bond

A type of bond issued by a corporation that can be converted into a predetermined number of the company's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.