As a Hedge Against Adverse Movements in Factor Costs and Exchange

question 62

Multiple Choice

As a hedge against adverse movements in factor costs and exchange rates,many firms will:

• A)outsource only to countries that have high labor costs,because they tend to be most stable.
• B)avoid outsourcing altogether.
• C)source the same products from suppliers based in two countries.
• D)change sources every month.

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Definitions:

Reverse Engineering

The process of deconstructing a product or system to understand how it works, often with the goal of reproducing or improving it.

SWOT Analysis

A strategic planning technique used to identify the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.

Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.

Direct Competition

Companies or businesses that offer the same or similar products or services to the same customer or market segment.