Dispersing the Performance of Value Chain Activities to Many Different

question 93

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.

---

Definitions:

Units of X

A quantitative measure used to express the amount of a variable or entity X.

Price of X

Refers to the current market price of a specific good, service, or commodity.

Utility Function

A mathematical representation that ranks an individual's preferences over a set of goods or services, showing their relative satisfactions or levels of utility.

Bliss Point

A term in psychology and economics indicating the optimal level of consumption where any further increase would lead to dissatisfaction.