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Over the past few decades, the cost structure of manufacturing companies has shifted. In the...

Question:

Over the past few decades, the cost structure of manufacturing companies has shifted.

In the early 1900s, direct material costs were substantial while fixed costs represented a small fraction of total manufacturing costs.

However, the cost structure has reversed and now fixed costs make up the majority of total manufacturing costs.

1. What caused this to happen?

2. What would explain the drastic change in cost structure?

3. Which industries would be most affected by this change?

Globalization:

Globalization is the term used noting that the whole world works with each other to ensure fair trade and the safe manufacturing of products. Computers need rare earth metals from China, and hire individuals in other countries to build their computers. Then they sell them in the United States for profit. This is all linked by Globalization.

Answer and Explanation: 1

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1. What caused this to happen?

Free trade helped accelerate this. By having trade deals with other countries, we were able to shift our focus onto...

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Internationalization & Globalization of Businesses

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Chapter 16 / Lesson 3
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To increase opportunities for expansion, many businesses participate in the international market. Explore the internationalization and globalization of businesses and explore various methods companies use to do operate in the world markets.


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