Which of the Following Statements Is True About Performing a Manufacturing

question 81

Multiple Choice

Which of the following statements is true about performing a manufacturing activity in several locations at once?

• A)A manufacturing activity must be performed at multiple locations when the fixed costs of setting up a production plant are high.
• B)Performing a manufacturing activity in several locations makes it difficult for a firm to accommodate demands for local responsiveness.
• C)Producing in multiple locations reduces the bargaining power of a firm against manufacturers.
• D)The larger the minimum efficient scale of a plant relative to total global demand, the greater the need for decentralizing production to multiple locations.
• E)Many firms disperse their manufacturing plants to different locations as a "real hedge" against potentially adverse moves in currencies.

---

Definitions:

Machine Hour

A unit measure representing the operation of one machine for one hour, used in costing and operational efficiency analysis.

Plant Expansion

A process by which a company enlarges its operational capacity or adds to its production capabilities, possibly by acquiring more space, machinery, or buildings.

Total Amounts

The full quantities or sums reached by counting, calculating, or combining all parts.

Variable Costs Per Unit

Costs that vary directly with the level of production or volume of goods produced, altering according to the amount produced.