« previous next »

Author Question: When making the make-or-buy decision, international firms must make trade-offs between costs and ... (Read 81 times)

nautica902

  • Hero Member
  • *****
  • Posts: 591
on: Jul 7, 2018
When making the make-or-buy decision, international firms must make trade-offs between costs and three other variables. What are they? Explain the nature of the trade-off international firms must make.
 
  What will be an ideal response?

Question 2

What countries are granted the most-favored-nation status under the GATT?
 
  A) less-developed nations
  B) GATT member countries
  C) any country that requests it
  D) only members of the WTO


DHRUVSHAH

  • Sr. Member
  • ****
  • Posts: 317
Reply #1 on: Jul 7, 2018
Answer to Question 1

International firms must make trade-offs between costs and control, risk, investment, and flexibility. Control: Making a component has the advantages of increasing the firm's control over product quality, delivery schedules, design changes, and costs. A firm that buys from external suppliers may become overly dependent on those suppliers. It can also be expensive to enforce contracts with suppliers. Risk: Buying a component rather than making it has the advantage of reducing the firm's financial and operating risks. Investment: Buying from others lowers the firm's level of investment. By not having to build a new factory or learn a technology, a firm can free up capital for other productive uses. Flexibility: A firm that buys rather than makes retains the flexibility to change suppliers as circumstances dictate.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

For about 100 years, scientists thought that peptic ulcers were caused by stress, spicy food, and alcohol. Later, researchers added stomach acid to the list of causes and began treating ulcers with antacids. Now it is known that peptic ulcers are predominantly caused by Helicobacter pylori, a spiral-shaped bacterium that normally exist in the stomach.

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

Did you know?

Hyperthyroidism leads to an increased rate of metabolism and affects about 1% of women but only 0.1% of men. For most people, this increased metabolic rate causes the thyroid gland to become enlarged (known as a goiter).

Despite the globe’s vast social change, people all over the world continue to make race a ... Despite the globe’s vast social change, people all over the world continue to make race a ...
Respirator decision logic based on the EPA method. It is very important to know when to use supplied ... Respirator decision logic based on the EPA method. It is very important to know when to use supplied ...
Severe arthritis can make everyday activities, like writing, typing, and handling objects Severe arthritis can make everyday activities, like writing, typing, and handling objects
Communication: Making Connections, 11th Communication: Making Connections, 11th
You make 4 semi-annual deposits starting at $350 and increasing at a constant rate of 2.14%. ... You make 4 semi-annual deposits starting at $350 and increasing at a constant rate of 2.14%. ...
The components making up the DNA Pol III holoenzyme The components making up the DNA Pol III holoenzyme
Video: Body plan of euglena Animation

For a complete list of videos, visit our video library