Imagine that your company is deciding if they should concentrate production, or disperse it among the...
Imagine that your company is deciding if they should concentrate production, or disperse it among the countries they sell their product to. The ______ the investment costs to establish each foreign operation, the more a company should consider ______:
higher; manufacturing in a single location if possible, from there export worldwide
lower; manufacturing in a few key locations, creating geographical hubs, and from there exporting to relatively nearby countries
lower; manufacturing where profit repatriation taxes are the lowest, and from there export to relatively nearby countries
Homework Answers
Correct option is (1).
If investment required to setup foreign operations is higher, the company becomes inclined to manufacture in a single location (plant) to avoid the high foreign setup costs, and export the goods from the single-location manufacturing hub to other countries.
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