Which of the Following Is a Disadvantage of a Strategic

question 25

Multiple Choice

Which of the following is a disadvantage of a strategic alliance?

• A)Entering into a strategic alliance makes it difficult for a firm to enter into a foreign market.
• B)As a result of strategic alliance,fixed costs of developing new products tend to increase.
• C)Strategic alliance gives competitors a low-cost route to new technology and markets.
• D)Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers.
• E)Strategic alliance always leads to a loss to either of the firms involved.

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Definitions:

Economic Order Quantity (EOQ)

A formula used by businesses to determine the optimal order quantity to minimize total inventory costs.

Carrying Costs

The total cost of holding inventory, which includes warehousing, insurance, spoilage, and opportunity costs.

Ordering Costs

Expenses associated with placing orders for inventory, including administrative expenses, delivery charges, and any other costs related to buying goods or services.

Carrying Costs

Carrying costs are the total expenses associated with holding or storing inventories over a certain period.