Placing manufacturing facilities in one concentrated location makes sense for all of the following reasons except:

Question

Quizplus · Accepted Answer

Placing manufacturing facilities in one concentrated location makes sense when trade barriers are low or non-existent, as it allows for easy access to a larger market. When trade barriers are high, it may be more advantageous to diversify production locations to avoid tariff costs. Universal product needs, stable exchange rates, high fixed costs, high minimum efficient scale, flexible manufacturing technology, and high value-to-weight ratios are all factors that make concentrate manufacturing a good choice.

Placing Manufacturing Facilities in One Concentrated Location Makes Sense for All