International Business 9th Edition by Charles Hill

Exercise 5

A chemical firm is considering how best to supply the world market for sulfuric acid. A manufacturing plant costs approximately $20million to construct and requires a moderately skilled workforce. The total value of the world market for this product over the next 10 years is estimated to be between $20billion and $30 billion range. The tariffs prevailing in this industry are moderate. Should the firm favor concentrated manufacturing or decentralized manufacturing? What kind of location(s) should the firm seek for its plant(s)?