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.

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Definitions:

Voucher System

An internal control mechanism in accounting, where documents (vouchers) are prepared for every transaction involving the payment of cash or transfer of funds.

Documentation

Written or electronic records that provide evidence of transactions, processes, or agreements.

Verification

The process of ensuring the accuracy and validity of data or documents.

Bank Reconciliation

A process that explains the difference between the bank balance shown in a company's bank statement and its financial records.