Manufacturing or decentralized manufacturing

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A construction chemical firm is considering how best to supply the world market for topical resins. A manufacturing plant costs approximately $20million to construct, which is expensive, requires a moderately skilled workforce, and has high fixed costs. However, if production meets significant scale, those fixed costs drop greatly per unit. The resins have relatively high value to weight ratio. The total value of the world market for this product over the next 10 years is estimated to be between $20billion and $30 billion range. The tariffs prevailing in this industry are small.

a) Should the firm favor concentrated manufacturing or decentralized manufacturing and why?

Reference no: EM132312431

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