Author Question: How does a product's value-to-weight ratio influence the production location decision? What will ... (Read 132 times)

jace · **on:** Jul 7, 2018

How does a product's value-to-weight ratio influence the production location decision?

What will be an ideal response?

Question 2

Why did Japanese auto makers accept the voluntary export restraint program that limited the number of cars that could be exported to the United States in the early 1980s? What role has domestic politics played in Toyota's U.S. strategy?

What will be an ideal response?

batool · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

Goods with low value-to-weight ratios tend to be produced in multiple locations to minimize transportation costs, while goods with high value-to-weight ratios can be produced in a single location or a small number of locations.

Answer to Question 2

Under pressure from the United States in the early 1980s, Japan voluntarily agree to limit its U.S.-bound exports of automobiles. The CEO of Toyota acknowledged that the company wanted to become the world's largest automobile company, but that this goal made it vulnerable to protectionist threats. The company felt that being a good corporate citizen and being accepted in the United States would be important to achieving its goal, and so pledged to start producing two-thirds of the cars sold in North America in North America instead of exporting. Toyota's strategy of siting its production facilities throughout the country means that the company has many political warriors on its side including 11 governors, 22 senators, and 151 members of the House of Representatives .