Answer:
Porsche hedges its foreign exposure to prevent it from the volatile currency market.
Hedging makes sense from the shareholder's perspective.
Hedging makes sense from the management perspective
The potential difference in interest between management and shareholders on the hedging strategy exists.
Explanation:
- Porsche hedges their foreign exposure to prevent it from the volatile currency market. The foreign operations of Porsche from the overseas implies that it has to convert its currencies to various denominations to US Dollar. so it faces the translation, economic and transaction exposure due to the fluctuating currency markets and exchange rates. In such a case, the Porsche has to hedge foreign exposure by using currency swaps or future contracts to ensure the loss from currency exchange is minimized.
- Yes, it makes sense from the shareholder's perspective to hedge because it protects the earnings of the company since the shareholders want their earnings to be maximized.
- Yes, hedging makes sense from the management perspective. The management are the agents of the shareholders and thus try to pursue hedge strategy on behalf of the shareholders to ensure the earnings are protected and losses due to currency exposure are minimized.
- There exists differences in interest between management and shareholders on the hedging strategy. The potential difference in interest between the shareholders and the management is due to the risk level.
Answer:
There are two answers to this::
1. No social or moral taboos on production
2. A competitive market system
Answer:
There are pros and cons of having 1,000 different suppliers for IKEA. In one way you can are not limited to choice, price or quality and have enough suppliers to shift production requirements to meet demand surges.
However, manage 1,000 different suppliers can also lead to quality issues that are difficult to sustain. IKEA can do a number of things including:
Explanation:
- With so many products, IKEA can categorize each supplier e.g. fabric suppliers, wood suppliers, kitchen etc. In this way, it will be easier for different departments to be set up that actively manage these category of suppliers.
- Since IKEA is a global brand, they can further categorise each supplier based on location. For example, they can have suppliers for the Asia-Pacific Market, other suppliers for the Middle East and another group for Europe and North America.
- IKEA can also outsource is supply. Going by an 80:20 strategy where 80% of them are direct suppliers while 20% of them are outsourced, third part suppliers who only step in when required.
Answer:
$35,000
Explanation:
Units started and completed means that out of the units completed and transferred, how many were started during the period. This figure is calculated in physical terms only. So there is no need to express any units in their equivalents.
So, this gives us an idea of how to calculate this :
Units started and completed = Units Completed and Transferred - Units in Beginning Work in Process
therefore,
Units started and completed = 40,000 units - 5,000 units = $35,000
