McKenziestumbleduponthequestionsofintermediateproductsandpostulatedthat''introductionoftradeinintermediateproductnecessitatesafundamentalalterationinclassicalanalysis'1.eededinremovingthisdeficiency.TheRicardiantradetheorywasnowconstructedinaformtoineludeintermediateinputtradeforthemostgeneralcaseofmanycountriesandmanygoods・ChipmancalledthistheRicardo-Sraffatradetheory・[Internationalproductionfragmentationtradetheory]InhischapterentitledLi&Fung,Ltd.:Anagentofglobalproduction(2001),ChengusedLi&FungLtdasacasestudyintheinternationalproductionfragmentationtradetheorythroughwhichproducersindifferentcountriesareallocatedaspecializedsliceorsegmentofthevaluechainoftheglobalproduction.AllocationsaredeterminedbasedonHtechnicalfeasibility11andtheabilitytokeepthelowestfinalpricepossibleforeachproduct・