Agri-Corp manufactures large farm implements and currently sources component parts for these large machines from fifteen different companies around globe. They use these sources to take advantage of lower costs. This demonstrates the idea of:

globalization of production.

Explanation:

Globalisation of production involves movement of capital, labour, and trade in the production process. As a result of reduced trade barriers, ease of capital and labour flows has made globalisation of production more prevalent among companies.

One major advantage of globalisation of production is reduced cost of production. For example if a company sources it's components at a cheaper prices from other countries, it cost of production will be lower thus giving it a competitive edge with regards to price.

In this instance Agri-Corp manufactures large farm implements and currently sources component parts for these large machines from fifteen different companies around globe. They take advantage of lower cost by doing this.

Globalization of production

Explanation:

Globalization of production simply refers to obtaining different products and services from several different countries in the world benefiting from lower production costs in those countries.

In this case, Agri-Corp only moves the products it purchases, it doesn't move any factor of production, just the finished goods or components (intermediate goods).

Increased globalization has also allowed that many services are outsourced to different countries, e.g. many companies have outsourced their customer service to India due to lower costs.

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