In March of 2010, while working for a British aircraft parts manufacturer in the finance department, you were directed by your global procurement director to construct the most financially secure-least possible variation-purchase of 50 metric tonnes (MT) of titanium scrap. Both the Russian and Chinese sources had the same price of £5.60/Kg and the freight costs have been equalised. Answer the following questions:
- List the specific financial risks you can identify for each supplier. Are they different or the same?
• Of each list, identify the ones that concern you most or have the greatest potential for financial disruption. Support your answer as quantitatively as you can.
• Is currency fluctuation on either or both of your lists? If so, would your protection strategies be the same or different? Explain how you would protect against currency variation.