General Education Development (GED) Practice Exam

A company planning to manufacture a product in emerging markets will likely consider which of the following factors?

1. Likelihood of political instability

2. Labor costs and regulations

3. Cost of shipping goods

4. All of the above

The correct answer is: All of the above

When a company is planning to manufacture a product in emerging markets, it is essential to consider various factors that can significantly impact the success of the operation. The likelihood of political instability is crucial because it can affect the safety of investments, the continuity of operations, and the overall business environment. Companies need to assess risks such as changes in government, social unrest, and regulatory changes, which can all disrupt manufacturing activities. Labor costs and regulations play a major role in the overall cost structure of manufacturing. Emerging markets often present lower labor costs, which can be a significant advantage for companies. However, it is also vital to understand local labor regulations, including wages, working conditions, and labor rights, as these can influence operational flexibility and compliance costs. The cost of shipping goods is another important consideration. Proximity to key markets and reliable transportation infrastructure can have a direct impact on the total cost of goods sold. Companies need to evaluate logistics, supply chain efficiency, and potential trade barriers that might affect shipping costs and timelines. Since all these factors—political stability, labor costs, regulations, and shipping costs—are interrelated and crucial for determining the feasibility and potential profitability of manufacturing in emerging markets, it is important for the company to take a comprehensive view and consider