Ronen Argo,the head of manufacturing of Rinker Audio Products wants the company to centralize its manufacturing in one location in a single country.In contrast,Neha Patel,the company's CFO wants the company to operate several manufacturing facilities in various countries.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.
Correct Answer:
Verified
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