Maintaining multiple manufacturing sites as hedge
Write down disadvantages and advantages of maintaining the multiple manufacturing sites as the hedge against exchange rate exposure.
Expert
To develop multiple manufacturing sites can be effective in managing the exchange risk exposure, however it can be costly since firm cannot be able to take the benefit of economy of scale.
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It is, normally, not possible to fully remove both the translation exposure and transaction exposure. In some cases, eradication of one exposure will also eliminate the other. However in other cases, removal of one exposure really creates the other.
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Conspicuous Consumption: It is the phenomena of spending money on services and goods which are not required but keeping them gives you a high social status. Those things are kept mainly for the purpose of displaying and creating a false image of your
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