Dispersing Particular Value Chain Activities Across Many Countries Rather Than

question 107

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:

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