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.
Answer: E. Many firms disperse their manufacturing plants to different locations as a "real hedge: against potentially adverse moves in currencies