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Which are reasons why a product, like jeans, might be produced in multiple countries?

a. Diversification of production risks

b. Access to different raw materials

c. Cost savings through lower labor expenses

d. Market responsiveness and quicker delivery times

1 Answer

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Final answer:

Jeans might be produced in multiple countries to manage (a) production risks, (b) access different raw materials, (c) save on labor costs, and (d) improve market responsiveness. Countries have different production capabilities due to varying factors like labor and technology. Trade restrictions can influence production locations by protecting domestic interests or addressing concerns such as environmental standards.

Step-by-step explanation:

Products like jeans might be produced in multiple countries for several reasons. Diversification of production risks allows companies to avoid being dependent on a single country and to manage potential regional issues that could disrupt manufacturing. Access to different raw materials can vary by region and having production in multiple countries ensures that companies can source materials more effectively. Additionally, cost savings through lower labor expenses is often a driving factor; by locating production facilities in countries with lower labor costs, companies can significantly reduce their overhead and produce goods more cheaply.

To provide market responsiveness and quicker delivery times, having production nearer to key markets can be essential. This can reduce shipping times and costs and enable companies to respond rapidly to changes in consumer demand. International trade allows even small economies to benefit from economies of scale and the variety offered by having numerous producers. Factors such as the quantity and quality of labor, availability of physical capital, and technology, affect each country's production capabilities, and thus, countries have different production possibilities.

Trade restrictions, such as tariffs and quotas, can also impact where products are made. Countries might impose such restrictions to protect domestic industries or jobs, or out of concern for environmental standards or national security. However, lifting these restrictions can lead to a decrease in costs for consumers, as evidenced by the end of the Multifiber Arrangement in 2005.

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