Question

You have hired an international agent and are ramping up production in your U.S. facility to keep up with the orders the agent has obtained. You receive an email from your purchasing manager.
From: M. Gomez

Subject: Order

We need to place a large order for bulbs for our solar kits. As you know, we import these bulbs from Japan. I have been watching the exchange rate between the U.S. dollar and the Japanese yen very carefully. The current exchange rate is $1 to 106.94 yen. However, sources tell me that the exchange rate is expected to be $1 to 115 yen very soon. Do you want me to place the order now or wait until the exchange rate changes?

Please advise how you want me to proceed.

Select an option from the choices below and click Submit.

A. Wait and place the order when the exchange rate changes.

B. Place the order now

Answer 1

Answer:

B. Place the order now.

Explanation:

Why wait until the exchange rate changes?  When is that going to be?  The best reaction would be to place the order when it is needed and not to speculate on the exchange rate.  Waiting until the exchange rate changes against Japan makes the prices of goods and services cheaper for foreign purchasers.  But, the wait could be endless.