Acme Co ,A Widget Manufacturer,is Acquiring Basic,Inc

question 60

Essay

Acme Co. ,a widget manufacturer,is acquiring Basic,Inc. ,another widget manufacturer.In view of the nature of the widget industry,a manufacturer's sales territories tend to correspond closely to the states in which it has manufacturing plants.Both Acme and Basic have plants in North Carolina,South Carolina,Tennessee,and Kentucky.In addition,Acme has plants in Illinois and Indiana,and Basic has a plant in Ohio.The post-merger market share of the two firms is likely to be 5 percent in the combined North Carolina,South Carolina,Tennessee,Kentucky,Illinois,Indiana,and Ohio markets,10 percent in the combined North Carolina,South Carolina,Tennessee,and Kentucky markets,and 32 percent in the combined North Carolina-South Carolina market,where Acme and Basic have been historically strong competitors.Which of the above markets is likely to be treated as the relevant geographic market for purposes of determining the legality of the acquisition? Why that market?

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Definitions:

Replenishment Responsibility

The obligation to ensure that inventory levels are maintained at sufficient levels to meet customer demand without excessive overstock.

Supply Chain Coordination

The synchronized efforts of all entities involved in a supply chain to ensure efficient and effective operations.

Performance Measures

Metrics or indicators used to assess the efficiency, effectiveness, and quality of operations and services within an organization.

Inventory Assignment

The process of allocating or designating specific quantities of inventory to particular orders, locations, or purposes.