A Disadvantage of the Global Model Is That

question 15

Multiple Choice

A disadvantage of the global model is that:

• A) it is less responsive to consumer tastes and demands.
• B) it has high manufacturing costs.
• C) it involves spending more time and money on product customization.
• D) its subsidiaries are limited to market and service functions.
• E) it provides too much freedom to its subsidiaries.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Variable Costs

Costs that vary in direct proportion to changes in the amount of production or activity, like costs for direct labor and raw materials.

Fixed Costs

These are expenses that do not change in total regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Unit Sales Price

The price at which a single unit of product is sold.