Identify the pros and cons of each choice

Assignment Help Operation Management

Reference no: EM131857479

You manufacture wine goblets (fine glassware) in the U.S. In mid-June you receive an order for 10,000 goblets from Japan.

You will ship the order to the Japanese customer in mid-December and payment of ¥400,000 is due at that time. You expect the yen to rise from its present rate of $1=¥130 to $1=¥100 by December. You can borrow yen at 6% per year. What should you do?

Hint: There are different ways you can handle this transaction in your business. It is a common issue that exporters often face.

There is no one right answer. Think about the possible scenarios, work the numbers, and select a course of management action that makes sense for your company. You should identify the pros and cons of each choice in writing up your answer.

Note also that in possibly borrowing yen assume that you will convert it into dollars and invest in a US financial institution and then convert it back to yen when it comes to pay the loan back.

Reference no: EM131857479

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