Dispersing the Performance of Value Chain Activities to Many Different

question 43

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

• 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) when 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 (such risks are greater when activities are concentrated in a single location); (2) supply interruptions (due to strikes,mechanical failures,or transportation delays); or (3) adverse political developments.
• E) All of these choices are correct.