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Concentrated to ensure you never lose control of the skies
The only reason not to is if you really cannot defend your airspace and you know with 100% certainty that you will be bombed to hell and back, Democratic Belgium / Denmark for example.
OR
If you are a minor nation and you need to rapidly build up arms to reinforce your underequipped divisions for a spot of very early for mongering before other nations build up larger forces / world tension gets too high.
or if you need to switch your strategic focus and simply dont have the IC . e.g build up of infantry first, once you catch up on research build planes or tanks, than go naval and might switch to CV planes / nav bombers
BUT you won't be able to switch production line and changing your tank/oplane model will reduce productivity
Dispersede allow to keep productivity decent even when getting bombed since the damages will be reduced and allow to switch production whitout losing too much of it.
you also start new line with better production level
For example, Communist China needs the guns, and upgrading the gun means restarting production efficiency (better to have 10 bad guns than 1 good gun), so you just stick with the basic Infantry Equipment. This is good for Concentrated. Concentrated is also good if you know you're not building a lot of factories (a lot of smaller nations), so you can get everything you need to get.
If, however, you get a ton of factories anyway, and a lot of technology boosts (like German Riech), and you'll be upgrading everything as much as possible, and you can have as many factories as you need, dispersed is pretty good.
I prefer concentrated for nations that run out of build slots.
Concentrated is better generaly only in strategy produce same model several years (eg start 36 infantry equipment and dont touch it). Otherwise factory output bonus is inferior to retention lose from changes.